Frequently, when it comes to digital transformation, the focus is on which technologies or analytics strategies businesses need to adopt. There’s sometimes an assumption that if companies are committed to innovation, success is just around the corner.
That’s just not true. Let’s take Gibson Guitars as an example.
The Innovation Failure of Gibson
Gibson Guitars was beloved by some of rock’s greatest: Mark Knopfler from Dire Straits, Billy Gibbons from ZZTop, Martin Barre of Jethro Tull, and Duane Allman of the Allman Brothers are just a few of the famous who play them.
Yet in 2018, at the ripe age of 116, Gibson filed for bankruptcy.
Despite fame and favor, Gibson couldn’t be saved from declining sales — nor from the missteps of former Chairman and CEO Henry Juszkiewicz, who was determined to keep a healthy customer base as guitar enthusiasts aged.
For example, in 2014, Gibson bought Philip’s audio division for $135 million, a move that was not well regarded. As the Los Angeles Times said, “Juszkiewicz traded a slice of Gibson’s soul in an attempt to become more than just the maker of the world’s most beloved guitar. He bought pieces of consumer electronics companies to relaunch Gibson Guitars as Gibson Brands Inc., a ‘music lifestyle’ company. It didn’t work out as planned.”
Juszkiewicz launched several new products — which most of Gibson’s customer base regarded as either unnecessary or of low quality.
“Gibson’s 2015 product line came in for particularly heavy flak. Intended to encourage new players to the brand, Gibson USA’s 2015 electrics sported an automatic-tuning system, wider necks and a brass nut – non-traditional features that were intended to make playing easier,” wrote musicradar.com.
This site goes on to blame nostalgia for that backlash, but others say the technology had a serious impact on the quality of the guitars.
The most reviled feature on Internet forums was the G-Force automatic tuning system, which was included on almost all Gibson guitars sold between 2015 and 2017.
“Guitarists seem to be incensed that Gibson would forsake its traditional designs and force unexpected changes down the public’s collective throat,” wrote Bob Cianci in Guitar Noise.
“Juszkiewicz tried diversification,” said the LA Times, but sources seem to agree that diversification was in a direction customers didn’t want.
Innovation Does Not Equal Digital Transformation
Juszkiewicz’s move could be called a failed digital transformation, which is about adding digital capability to your business, so that you can respond to changes in the marketplace. But Gibson’s move was more about adding electronics, not about true transformation.
In fact, Gibson seemed to be making decisions in a vacuum. “There is no way of knowing if their sales systems could communicate with each other,” said Vivek Sriram, guitar enthusiast and CMO of Lucidworks. “But if they were, it was clear management wasn’t listening. Just rolling up sales numbers and exploring social media mentions would have told them they were on the wrong track.”
Fender Goes With a Digital-First Play
Gibson’s rival, at least since 1946, is another famed American-based guitar maker, Fender Musical Instruments Corp. In 2017, Fender, launched the online subscription service Fender Play. The Verge describes it as a “guitar lessons web platform and iOS app aimed at getting beginners hooked with visual, bite-sized tutorials.”
Baby boomers are, as the Washington Post said, “looking to shed, not add to, their collections. Andy Mooney, Fender’s CEO, told the Washington Post that they key to Fender’s continued success “is to get more beginners to stick with an instrument they often abandon within a year.”
“The key to Play is search,” says Sriram. “Students get hooked when they find the songs they want to play.” This online introduction to playing — and hearing recognizable tunes — encourages the budding player to continue. Instead of abandoning the instrument, explains Sriram, the player becomes proficient, then wants a better and more expensive guitar.
From Physical Product to Digital
Fender Play moves the Fender from a physical product company to a digital-inclusive one. This digital-born product is a true digital transformation story — it allows Fender to meet marketplace needs so that the company can continue to thrive.
But that digital effort also includes adapting to a world of online music consumption. “In Fender’s case we think we are just doing a really good job of being a contemporary provider of product and a contemporary marketer of product through predominantly social media and digital channels,” Mooney said to Forbes.
It is also important to note that Fender made some savvy business moves that have increased sales after a dip in the middle of the decade. According to Reuters, Fender “overhauled instrument details like the feel of the frets under a player’s fingers and the electronics that reproduce the guitar’s sound but skipped digital add-ons.”
The company also moved some of its production to Mexico to reduce production costs and keep prices lower for consumers.
And Mooney has also focused marketing efforts on women “after company research revealed nearly half of first-time guitar buyers are women.”
All of this reinforces the idea that digital transformation will fail if companies don’t keep their customers foremost in their minds. Decisions pertaining to consumer preferences must be reinforced with data-driven analytics.
Digital transformation will always be more about culture than technology. Obviously, technology will (and should) play a huge role in any company’s transformation strategy, but companies must always keep the end goal of the transformation in mind: namely, to better serve their existing and potential customers.
The tale of these two guitar makers illustrates that digital transformation is part of the solution — but being agile enough to give customers what they want should be the goal.
Evelyn L. Kent is a content analytics consultant who specializes in building semantic models. She has 20 years of experience creating, producing and analyzing content for organizations such as USA Today, Tribune and McClatchy.