As of January 1 of this year, John D’Addario III assumed the title of CEO in addition to his previous role as president of D’Addario & Co. As son of John D’Addario, Jr. and nephew of the previous CEO, Jim D’Addario, John D’Addario III (J3) has been involved with the family business nearly his entire life and brings those many years of experience and insight to this new leadership position. For his part, Jim will continue his duties as chairman of the board while also taking on the new position of chief innovation officer.
MMR recently sat down with J3 and Jim to learn of their new roles at the company and what’s changing (and what’s not changing) at one of our industry’s most iconic and beloved brands.
John, first off: congratulations on the new position. Let’s start with a little bit of history — for those unfamiliar, can you talk about how you first began to work at the family company and how your roles evolved to the present day?
John D’Addario III: I often joke that I literally grew up at D’Addario. I worked just about every summer at the company since I was 12 years old, starting in shipping & receiving, as well as a number of industrial engineering projects. Following my graduation from the University of Richmond, I actually worked in the cosmetics business for three years as a production & operations manager before joining D’Addario full-time in a similar role.
From there, I assumed the responsibility as the D’Addario Fretted Strings product manager for a brief period before moving onto national sales. Eventually, in 2001 I became the VP of global sales and for the next six years concentrated on the restructuring of our sales organization as well as our global expansion. In 2007, I joined the executive ranks in a more of a strategic role as executive VP and eventually became the company president in 2014.
Having had the privilege of working closely with dynamic leaders like Jim and my father (John Jr.), I was also fortunate to take advantage of a number of leadership development programs, as part of our family succession planning. These experiences helped me immensely in honing my skills in advance of assuming my new responsibilities as CEO and president.
Jim, what was the catalyst behind your decision to step down and hand the CEO reigns over to J3?
Jim D’Addario: Actually our board of directors, family stockholders, and management team have been openly working on succession planning strategies for many years. This is just the culmination of the work that we have all actively contributed to. Like John, I have been active in the business on some level since I was 12 or 13. My first visit to the NAMM show was 1963 when I was 13 and our family business was known as Darco Music Strings. I have been blessed on many levels, one of which was to have a job that I was so passionate about, it rarely felt like work. Sure, I had some tough times, made some silly decisions, or had to do things I just really hated doing, but for the majority of my time on the job, it was a labor of love.
I have also been blessed with many talented and passionate family members, starting with John D’Addario, III who is ready to assume more responsibilities as we execute this transition from the third generation in America to the fourth. John and I have worked hand in hand since he joined the company full time. He is definitely ready to take the wheel.
That being said, I don’t think I can ever stop working completely. I love creating new products, processes, and marketing too much. I want to keep my creative juices flowing, but I am very eager to hand over the responsibilities of the CEO to John and put my focus on future innovations for the company. I know John and the tremendous team of family and non-family members we have assembled will do a great job.
Again, for Jim: In your new, dual position as chairman of the board and chief innovation officer, what duties will you be assuming, specifically?
Jim: The chairman of the board position is something I have been doing since the early 2000s. I will just continue to assist in planning the quarterly board meetings, reviewing the board materials being submitted and working with John and the management team to make sure that we follow up with the requests of the board of directors and stockholders. This whole process of having real board meetings with real work on the agenda is something we take very, very seriously. In fact, I have learned so much from our outside board members I can’t imagine running the business without it at this point.
I just plan on helping to maintain continuity of leadership in this role without interfering with management in any way. As for the director of innovation position, this is the part of my work that I have always loved the most. I plan on continuing to oversee new product development, machine, and process design and creating innovative marketing initiatives in the same way I have in the past. We are also planning on expanding our research department to bring on a couple of more people that will be focused on true research projects that may result in products that are completely different than anything we have developed and offered in the past. I am excited to be able to just focus on this area.
John, similar question: what actual changes in your day-to-day activities are involved in becoming CEO? Are there certain previous responsibilities that you’ll be handing off to others?
J3: The key to success in my new role as CEO is the team I surround myself with. We have built a highly complex, global business that requires a team of sophisticated, talented leaders to oversee it. Over the course of the last few years, Jim and I have been working very hard with our board of directors and our family business advisors in reengineering our reporting structure and building a very strong, capable team.
For example, we hired an experienced, savvy chief revenue officer in Bob Horvath and promoted Chris Griffiths to our new chief sales officer, both of whom will partner with our CMO, Jonathan Turitz and our business unit and regional leaders in managing all of the commercial aspects of the business. On the operations and administrative front, Glen Stalter recently joined us as our new CFAO and DJ Rettman as our new chief information officer, both of whom bring a wealth of experience in their respective fields and will partner with my brother Michael, who has stepped up to our VP of operations. The aforementioned individuals, as well as our diverse group of emerging middle management talent all, allow me, in my new role, to focus less on the day-to-day details and more on the future strategic direction of our global, family business and aligning our team to it.
In addition to being one of the leading names in MI, D’Addario & Co. is also one of the most prominent family-owned businesses in the industry. How important is maintaining that dynamic to you both?
J3: Extremely important and our reputation as a family and business is something I am passionate about. Our family and family of employees have worked very hard and re-invested considerably in the business for many years to earn the respect as an industry leader, and I am very excited about the opportunity to not only sustain, but hopefully strengthen it. We’re the first to admit that we are far from perfect, but at the same time we strive for perfection each and every day, as part of our continuous improvement culture. We are also very proud of and committed to giving back to the industry and community, particularly through the D’Addario Foundation, which generously supports music programs around the world. All of this would not have been possible if not for our family’s commitment to the sustainment of the business and the important succession planning we have done to prepare next-generation leaders like myself to be responsible stewards of the business.
For both of you: when you look back on your careers thus far and the growth of D’Addario & Co., what are some of the moments or achievements you’re most proud of, or that you think were particularly significant in growing the company?
J3: A number of things come to mind. A catalyst to building world-class manufacturing operations has been our commitment to re-investing in automation and vertical integration opportunities, but the primary driver in attaining a strong reputation as a high quality, low-cost manufacturer was our commitment to Lean, continuous improvement in 2007-2008. When the Great Recession was at its peak, we used this slow period to invest heavily in the training of our employees in Lean as a philosophy which ultimately enabled us to not only save, but grow job opportunities. We were also able to re-shore products that we had previously outsourced overseas. This commitment to Lean has continued in a big way, across our entire organization and we still believe we have tons of room to improve. This mentality has enabled us to remain globally competitive as a U.S. manufacturer.
I’m also very proud of what we have accomplished in the last decade, the magnitude of which is arguably more than any period in the company’s history. In addition to doubling the size of the business, over the last 10-years we also integrated several acquisitions, developed our own string raw material manufacturing capability, and conducted a comprehensive rebranding which culminated in a brand book, new logos, and new packaging, all of which reinvigorated our brands and business in general. During the last decade, we also expanded our global footprint in a big way with the establishment of our own distribution companies in Europe (UK, Germany, and France), Australia, and China, in addition to a sales and marketing office in Singapore. All of this work has enabled us to think more globally as a company and realize the amazing opportunities we have to grow.
Jim: As an answer to this question I immediately start to run down a list of accomplishments, but that is a bit of a narcissistic exercise. On a higher level, one of the things I am proudest of is the way we have kept our family together while continuing to run and grow a successful business. My parents and my siblings were truly blessed with healthy, passionate and talented children; many of whom now have important roles in our family businesses. In 1997 when my brother John, Jr. decided to retire, I was really frightened. Essentially, when John was full time in the business I had the innovation role that I am re-inheriting now. My job was easy. His departure made it necessary for me to learn every aspect of the business. I realized without some kind of family counseling, I probably would not succeed. I also realized I needed an outside board of directors. I did not study business in college. I studied music. I needed professional help. Embracing open communication with our family business advisors, board, and family employees has paid off tremendously and is one of the accomplishments we are all proud of.
Of course, our four-decade-long, continuous string of new product and technology innovations is also something I am equally proud of; from Half Rounds, to phosphor bronze, to Pro-Arte classic strings, to NYXL, to XT, to Planet Locks, Level 360, UV coatings, to our in-house printing, wire making, nylon extruding. our new Venn synthetic reeds we are introducing at NAMM and more. I most proud of the culture of continuous curiosity we have created that has made these technological advances possible.
In a practical sense, what changes (if any) can D’Addario dealers and end-users expect in the coming months as a direct result of this shift in leadership?
J3: First let me reassure our customers as to what they can continue to expect from us. We are committed to not only exceeding their expectations with phenomenal customer service but also providing highly innovative, premium quality products they can rely on. Though our relentless efforts to make it easy to do business with D’Addario will continue, what will change is how we engage them through new, creative content and experiences. For example, our plans are to continue to invest heavily in digital strategies such as our new, consumer loyalty program called Player’s Circle, in our dynamic B2B e-commerce site called Inner Circle, in our newly launched website and in a content library where our customers can easily attain digital content that can be used for the merchandising, promotion and marketing of our products.
Jim: I don’t think our customers are going to notice anything but continuous improvement. We are not changing our recipes – just changing the head chef.
Any parting thoughts, previews of coming developments, or anything else you’d like to share with our readers?
Jim: I believe our company is positioned to see unprecedented growth in the coming years and our B2B customers will have the opportunity to profitably share in that growth. We are committed to continuing to develop the most innovative products, but we are also committed to helping our B2B customers grow and make a profit. We will continue to build equity in our brands, and continue to work closely with our B2B partners.
