Max Mednik
  • Home
  • About
  • Interests
    • Angel investing
    • Magic
    • Scuba Diving
  • Blog
  • Contact

Readings and musings

Marty Albertson of Guitar Center

6/14/2011

0 Comments

 
Picture
Eric Clapton's Blackie
One of the most fun speakers we had in Riordan's Leadership class was Marty Albertson, the former CEO of Guitar Center. His talk focused on the use of creativity in leadership (creativity being the parallel to music). He started his career as a record producer and studio engineer in the Haight-Ashbury district of SF. He thought he could be creative in art but actually found he was most creative in managing people.

He has a passion for collecting famous guitars, and in class, he showed us Eric Clapton's Blackie guitar (above) worth $2 million. He turned this passion of his into a business opportunity for Guitar Center, which at his suggestion created 25 knockoffs of the guitar and sold each for $50,000. They sold all 25 knockoffs in 10 minutes. (They got Clapton's permission beforehand and gave some of the proceeds to his favorite charity.) This was an example of creativity in marketing.

Some of his modus operandi:
  • Exceed expectations of superiors
  • Exceed expectations of consumers
  • Always say please and thank you
  • Most important leader in society: leader of family
  • Be on the lookout for opportunity
He originally went to Guitar Center as a sales clerk, and though he did well, he thought it wasn't for him. He got some advice from a mentor who told him to find something in his life where he can become one of the best at and dedicate his life to it. As he rose in the company all the way to CEO, the biggest lesson he learned was that when he's in over his head, he has failed; now he leans on others to help him through challenges.

He went through 5 sales of the company, bought out 3 partners, experienced 2 LBOs, went public, went private, and now considering going public again. Wow!

After they bought out the first founder's widow, they levered the business too much (frothy times), and JPMorgan Private Equity became the owner. He realized that they were smart people but never ran anything, and most seemed too analytical and unable to make decisions without backup analysis. Now, the current PE owner is Bain Capital (since they went private). He believed that really big decisions must be made with the gut. He thinks testing and analysis has its use but most of the time is inconclusive.

For each issue, he decides, "is it a 1 or a 10 in importance?" Then, even if he's passionate about one way or the other, he can decide if it's worth the time and energy to fight about it.

Keys to customer service: low turnover of staff (went from 100% to 50% turnover on the sales floor) and keeping policies as simple as you can.

They now have 40% market share and consider their culture the key to their success.

He closed by posing an interesting problem of negotiation to the class: a customer offering to sell their vintage guitar at way below market to them. For used/vintage guitars, the only difference in valuation is due to age (like a step function). After the class struggled to come up with a good answer, he explained that their philosophy is to earn people's trust and tell the truth, paying the customer way more than they initially asked for. That sort of philosophy definitely left an impression on me.
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Archives

    July 2024
    June 2024
    May 2024
    March 2024
    February 2024
    January 2024
    November 2023
    August 2023
    June 2023
    May 2023
    April 2023
    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    January 2022
    October 2021
    August 2021
    July 2021
    June 2021
    May 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    April 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    May 2019
    March 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    February 2018
    January 2018
    November 2017
    October 2017
    September 2017
    May 2017
    April 2017
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010

    Categories

    All
    Angel Investing
    Cacti
    Cars
    China
    Community Service
    Culture
    Design
    Djing
    Dogs
    Education
    Entertainment
    Entrepreneurship
    Family
    Finance
    Food
    Google
    Happiness
    Incentives
    Investment Banking
    Judaism
    Law
    Lighting
    Magic
    Marketing
    Medicine
    Networking
    Nolabound
    Philosophy
    Professionalism
    Psychology
    Reading
    Real Estate
    Religion
    Romance
    Sales
    Science
    Shangri-La
    Social Entrepreneurship
    Social Media
    Sports
    Teams
    Technology
    Travel
    Turtles
    Ucla
    Venture Capital
    Web Services
    Weddings
    Zen

    Subscribe

    RSS Feed

Picture
Picture
  • Home
  • About
  • Interests
    • Angel investing
    • Magic
    • Scuba Diving
  • Blog
  • Contact