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Gibson Restrung

Back when Henry Juszkiewicz was just another college engineering student playing lead guitar in a party band, no one himself …

Back when Henry Juszkiewicz was just another college engineering student playing lead guitar in a party band, no one himself included–would’ve guessed that he’d end up in a job that would allow him to rock out on the guitar in his office everyday. But that’s exactly what happened when Juszkiewicz became chairman and CEO of Gibson Guitar Corp. in 1986. The jump from lead guitarist to leader of one of the world’s premier musical instrument manufacturers was far from over-night, but every step Juszkiewicz made along the way took him closer to his dream gig.

After attending Kettering University  then known as General Motors Institute-and attaining an MBA from Harvard, Juszkiewicz began his career at the mergers and acquisition firm of Niederhoffer, Cross, and Zeckhauser, where he climbed to the post of executive VP of M&A. In 1981, he left the firm to steer Phi Technologies, a struggling high-tech OEM electronics firm. Five years later, with Phi Technologies back on its feet and Juszkiewicz ready for a new challenge, he came across a floundering Gibson. The  company’s annual sales had plummeted to $10 million, dropping at a steady annual rate of 20 percent, and Gibson had lost much of its prestige along the way.

“When I first looked at Gibson I really didn’t see it as a large growth opportunity,” Juskiewicz recalls. A year of experiencing the industry firsthand-as opposed to analyzing it-changed his mind. By Juskiewicz’s fourth year at the helm, Gibson was exceeding his initial expectations, something it continues to do today, with annual sales approaching $150 million and international distribution to more than 80 countries.

Thanks to his lifelong passion for music, Juszkiewicz approached Gibson’s situation from a consumer standpoint. “One of the things that was missing in this industry is a focus on consumers, and that’s because companies actually sell to retailers,” he says. “So there’s a tendency to focus on those retailers and not to look at what happens to the product past that economic transaction because it’s out of your hands at that point. But if you don’t go past the retailer to the consumer and see what that consumer wants and learn about their value system, then you’re out of luck—–and so is the retailer who depends on you for a living.”

Not satisfied with simply resurrecting Gibson’s hallowed name, Juszkiewicz tapped his M&A experiences to fill out the Gibson musical instrument family of guitars, basses, banjos, and mandolins by acquiring Epiphone instruments, Dobro resonator guitars and basses, Slingerland drums, Tobias basses, Steinberger guitars and basses, Flatiron mandolins, and Oberheim keyboards. “They were all difficult, and some of them have yet to actually perform up to expectations,” he says, “but at the same time, we scored fairly well on some of them, and all of them will end up in excellent positions in their respective product categories.”

The firm’s next big goal is to scale $1 billion in revenue, he says. “I think do that within the next seven or eight years.” In the meantime, he’s pushing for the Gibson name to cross into the general consumer market. His first move was a Gibson Newport Festival held in conjunction with concert promoter George Wein this past July. Plans to place Gibson Cafés and Guitar Galleries in major cities across the country are also under way.

According to Juszkiewicz, a higher profile-along with Gibson’s inherent strengths and image—-will give the company a distinct competitive advantage. “Our motto is ‘quality, prestige, and innovation,’ ” he says, “and our company’s been innovating since Orville Gibson decided to build a guitar and a mandolin differently.” Juszkiewicz ought to know: he’s still got the same old, beat-up Gibson ES-335 he played back in his party-band days.

About Michael Gelfand