New leadership at Steinway & Sons: Kurrer and Losby bring global perspective and enthusiasm to famed piano maker.

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OVER THE PAST TWO decades, Steinway & Sons has compiled an enviable record of growth and consistent profitability in a global piano market characterized by contracting unit volumes and excess production capacity. The newly installed leadership team of Thomas Kurrer, president of Steinway Global, and Ron Losby, president of Steinway Americas, views its immediate challenge as continuing the manufacturing and marketing policies that have driven this market-beating performance. Kurrer and Losby replace Bruce Stevens, former president, and Frank Mazurco, former executive vice president, who retired at the end of 2007 after 22 years on the job.

As veterans of the company--Kurrer was tapped as general manager of Steinway's Hamburg operation 18 years ago, and Losby has held a variety of sales and marketing posts during his 20-year tenure--both are steeped in the unique Steinway culture and well versed in the strategy behind the company's success. As one observer noted, "If anything goes wrong, they won't be able to say it was because they lacked experience."

Kurrer, who will be based in Hamburg, initially trained to be a lawyer but upon graduation opted for a job at the German American Chamber of Commerce rather than a career in law. Ironically, for one of his first assignments, he traveled to a NAMM show in Atlanta to promote the Frankfurt Musik Messe. "At that time, I never in my wildest dreams imagined that I would ever be involved in this industry," he said recently. But after 12 years in the specialty steel industry, including stints living in the U.S., he enthusiastically signed on to guide Steinway's German operations.

A Juilliard graduate in piano, Losby took a job at a Wurlitzer retail store in Chicago, after, as he explained, "I realized I wasn't going to be the next Horowitz and that I needed to eat." From Wurlitzer, he went on to work at Baldwin's Chicago retail operations. He joined Steinway as Midwest district manager in 1987. Ten years later he moved to London to head Steinway's retail business there. Over the past decade he assumed responsibility for all of the company's European retail operations.

Well-documented economic woes in markets around the world have created a challenging environment for piano sales. Nevertheless, Kurrer and Losby remain unshakably optimistic in their outlook for Steinway. Pointing to new market opportunities in the formerly communist countries, the growing global acceptance of the recently introduced Essex piano line, and a rock-solid distribution network, Kurrer describes the job of new management as "maintaining the legacy of our illustrious past." He added, "If we rest on our reputation, it will quickly tarnish. But if we work to consistently deliver the right product, there are great opportunities for us."

Although Steinway's unit output is relatively modest, especially when compared with leading Asian producers, the company is one of the industry's most global. The factory in Long Island City, New York, builds pianos for North and South America, while the operation in Hamburg, as Kurrer points out, "takes care of the rest of the world." In addition, Steinway maintains wholly owned distribution subsidiaries in Japan and China. This global approach dates back to 1880, when Theodor Steinway returned from New York to his native Germany to open a factory in Hamburg. Since then the company has effectively made markets everywhere that music is performed. Steinway pianos can now be found on concert stages and retail stores in over 50 countries. Reflecting the importance of Steinway's global position, Kurrer is the first head of Steinway to be based in Germany.

During his 18 years running the Hamburg branch, Kurrer points to his efforts to unify and coordinate Steinway's far-flung operations as a signal accomplishment. "We have always been one company on paper, but not always in practice," he noted. "Now I can say that Steinway's operations are effectively unified. With the Steinway, Boston, and Essex lines, we have the same products in every market, and we present the same face to consumers around the world." Kurrer can also take credit for establishing beachheads in important emerging markets.

"Everyone knows about the spectacular growth of the Chinese market," he said. "We recognized that opportunity and seven years ago established our own distribution company there. Equally important, but far less obvious, is the opportunity presented by the former communist countries in the Eastern bloc." Recently Steinway has opened dealerships in Poland, Hungary, and Russia, while company representatives have been traveling extensively to forge ties with music schools and concert venues throughout the region. Kurrer believes that these emerging markets will bolster Steinway results for a decade if not more. To emphasize this, he cites a startling bit of data. "When I joined Steinway in 1989, 45% of the Hamburg factory output was sold in Germany. Today, Germany takes only 10% of our production."

This combination of limited production and global reach help insulate Steinway from economic fluctuations. Kurrer noted, "Relatively small unit sales can have a major impact on our results. If we can sell five more grands in each of the 20 former communist countries, that adds up to 100 pianos, which is a big number for the Hamburg factory."

Although he will be based at Steinway's New York factory, with responsibility for North and South America, Losby also brings a global perspective to his new post. Having sold pianos in Europe and the U.S., one of his stated goals is to foster an exchange of "best practices" across the ocean. "U.S. retailers have developed creative and effective promotion techniques that could be applied in other markets around the world," he noted. "In Europe, customers tend to be a lot more finicky about the details of fit and finish, which has forced dealers there to sharpen their skills in product presentation. These are just a few of the examples where dealers can learn from each other."

Despite differing cultural nuances around the world, Losby contends that wherever Steinway pianos are sold, the quality of the retail salesperson is the single most important factor in determining success. "Contrary to what many people think, a lot of Steinway pianos are not purchased by accomplished pianists," he explained. "These customers could buy another piano. Effectively selling them requires a salesperson who can make a compelling product presentation. There is no substitute for these people."

Affirming Steinway's longstanding limited distribution policy, Losby said that the key to attracting and retaining these skilled individuals continues to be "providing an appropriate retail profit opportunity." He added, "We ask our dealers to excel in the level of service they provide and in the way they present our pianos. That type of excellence costs money, in terms of personnel, facilities, promotional expense, and inventory. Exclusive territories are our way of ensuring that they have the ability to cover those costs. It's a policy that was established by my predecessors, but one that we remain committed to."

Kurrer and Losby are fulsome in their praise of the leadership provided by both Bruce Stevens and Frank Mazurco. Summing up their strategy going forward, Losby stated, "We have established a successful strategy for running Steinway. Our job is to adapt that strategy to a changing world."