Craftsmanship and innovation, evolving tradition in the 21st century
A conversation with Ron Losby, Steinway Musical Instruments Inc.
You cannot be complacent and rest upon your reputation…you must innovate; you must consistently improve the instrument; you must deliver it in a better way; you must sell it in a more effective way, and you have to consistently train your workforce.
- Ron Losby
Steinway Musical Instruments Inc. CEO Ron Losby discusses how his company is using technology to innovate a traditional luxury product to create recurring revenue streams and broaden the market beyond those who play piano. In addition to innovation, learn about how Steinway retains its workforce, and why, despite a growing Chinese market, the business continues to manufacture in the United States.
In this episode of “The Middle Market Transformative CEO,” hosts Joe Brusuelas and Robert Reiss speak with Losby about the importance of social media for small and midsize companies, and the strategic advantages of Steinway’s New York headquarters for workforce development and brand reputation.
Pianos crafted by New York-based Steinway & Sons remain the first choice of world-class musicians such as Mitsuko Uchida, Billy Joel and Diana Krall. Now the company wants them to be the first choice of everyday music aficionados as well.
Costing tens of thousands of dollars, Steinways are built by master artisans to last a lifetime. Faced with the challenge of limited repeat business, the 165-year-old company has been rolling out a new line of sophisticated player pianos, dubbed Spirio, that incorporate complex audio technology to precisely replicate performances given by master pianists, playing in real time or on demand.
“Innovation has always been at the core of Steinway & Sons,” Ron Losby, the company’s CEO, told The Middle Market Transformative CEO radio show, a joint production of The CEO Forum and RSM US LLP, in August. The New York-based business, founded by German immigrant Henry Engelhard Steinway in 1853, is responsible for creating the modern grand piano.
With development that began some 15 years ago in London, Steinway’s Spirio project—then called Astoria—was originally targeted at colleges and universities, Losby said. The idea was to augment musical instruction by allowing students to hear playbacks of themselves as well as masters.
“We quickly understood it wasn’t just for this small core. This was for everybody who enjoyed music,” said Losby, himself an accomplished pianist, adding: “Now anyone who can listen to music can enjoy and reveal the beauty of a Steinway piano in their home.”
Losby said that the new product line was so successful that demand outstripped supply in 2016 and 2017 following its launch. He considers this success a testament to Steinway’s ability to tap into a completely new audience for its products.
“We bring George Gershwin, Arthur Rubenstein and Thelonius Monk back to life,” Losby says.
Spirio is now working on new features such as two-way video to accompany playback features, allowing for remote instruction sessions that cater to students’ busy lifestyles.
Steinway favors social media over traditional advertising to reach would-be customers. Platforms such as We Chat have been critical in building brand recognition in China, Steinway’s fastest-growing market, where piano instruction is mandatory for all children and between 30 million and 50 million kids are estimated to be studying piano.
“This enables us to access customers that frankly I don’t know how else we would,” Losby says.
Despite technological innovation, Steinway remains committed to its tradition of expert craftsmanship. That’s one reason the company continues to manufacture pianos in the United States. With its largest factories in New York, the company maintains proximity to newly arrived immigrant groups, many from Eastern European countries that produce master woodworkers, Losby says.
“We have access to these immigrants, we train them, and that’s why Steinway has such a long history of having employees that serve, 30, 40 years,” he says. “Being close to this labor market over the years has been one of our strategic advantages.”
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