UK: Yamaha Retreat leaves Doughty unbowed - PREMIER PERCUSSION.

UK: Yamaha Retreat leaves Doughty unbowed - PREMIER PERCUSSION. - After mastering the mores of its Japanese parent, Premier Percussion reinvented its product, bought itself back and now happily marches to its own tune.

by Charles Darwent.
Last Updated: 31 Aug 2010

After mastering the mores of its Japanese parent, Premier Percussion reinvented its product, bought itself back and now happily marches to its own tune.

There is doubtless a Japanese idiom for the sensation in Tony Doughty's corporate heart: something along the lines of "joy-of-watching-neighbour-fall out-of-cherry-tree". Nevertheless, Doughty struggles against an obvious desire to grin when he says, "Japanese business has begun to feel a cold wind this year"; allows himself all but the smallest of smiles as he adds, "There's been a degree of discomfort ever since the Nikkei started to fall"; and finally only emits a discreet titter when he concludes, "Our friends in Tokyo say the bubble has burst". It is as virtuosic a performance of Nipponese corporate politesse as could be imagined.

But then Doughty, executive chairman of Premier Percussion, has been well taught. On 20 November last year Premier, Britain's leading manufacturer of drums, glockenspiels and other percussive instruments, announced a management buyout. Nothing extraordinary in that, but for the identity of the vendor: the Japanese musical monolith, Yamaha. Yamaha had spent the previous decade gobbling up smaller fry in the instruments business all over the world.

It consumed Premier in 1987. For five years, Doughty learnt Japanese business mores through what linguists refer to as the "direct method". Now the only immediate evidence of the Japanese sojourn at Premier's Leicester HQ is a set of drums in the foyer emblazoned with a large YAMAHA ("H'm, have to move those," ponders Doughty), and a book in the chairman's office entitled, providentially, The Japanese Myth.

Yahama's decision to draw in its internationalist horns and focus on the Pacific Basin has left him, as major shareholder, with a firm that is both numinously and tangibly better off. As befits the chief executive of the first British company to buy itself back from Japanese multinational ownership, Doughty does not bow from the waist by way of greeting.

The buyout is an unlikely culmination to what was always an unlikely story. Back in 1922, a brace of jazz-playing brothers named Albert and Fred Della Porta - a drummer and saxophonist respectively - set up as drum manufacturers in a Soho basement. By dint of bright marketing (including the despatch of unsolicited free drum kits to potential US dealers) and technical innovativeness (the brothers pioneered the first European electric guitar in the 1930s, a fact for which lovers of music may feel only ambiguous gratitude), the Della Porta noisy brainchild - the Premier Drum Company - rapidly became unofficial warrant-holder to the Jazz Age.

It was a position that Premier was to hold for half a century. The firm had a good war manufacturing gun sights, the result of a foray into high-specification light engineering. This left it well placed to cope with the new technological drumming demands of Swing, Beat and Rock and Roll after the war. When The Beatles emerged from Liverpool in the early '60s to announce the dawn of the era of peace and love, it was to the accompaniment of Premier drums. Orders from John, Paul, George and Ringo at the firm's new Leicester factory were followed in short order by others from bands with names like Status Quo and Pink Floyd. The firm's tympani and glockenspiels, meanwhile, percussed with such classical giants as the Bolshoi and French National Orchestra, while marching bands from Aden to Zanzibar oompahed to the beat of kettle and snare drums bearing the Premier label.

This sanguine state of affairs did not last, however, and the reason for its demise was, once again, Japanese. "Their exports began to arrive in the early '70s," recalls Tony Doughty. "At first, no one took them seriously, thinking they were just cheap goods. What we didn't realise then was that, provided you get seven out of 10 things right, low costs matter." Premier's costs were by no means low. Moreover, in an era in which rock musicians were beginning to bite the heads off chickens on stage and jump up and down on their drum sets, the firm's claim to be long-established producers of class goods did not carry the same kudos it had a decade earlier. Indeed, once the safety-pinned nose became chic, Premier's smack of traditionalism looked like something of a liability.

Management, too, remained unevolved. By and large, Premier was run by a team whose special subject was drumming circa 1955. It may well have been the only company in the world whose boardroom votes were registered as "Yeahs" and "Nahs". "There was no awareness that what was needed was a complete shake-out, or whatever the favoured jargon is these days," growls Doughty. In 1984, that awareness was forced upon them by the attentions of the Official Receiver from whose tender clutches Premier was eventually rescued by a management buy-out. By now it was clear that a nifty way with drum riffs, while unquestionably impressive, was not the answer to Premier's problems. Doughty, with a background in engineering, was brought in as "an older and a wiser man". One point in his favour was that he had never so much as looked at a drum in anger in his life.

What happened next became both part of the BBC's video Managing In The Competitive Environment and a case study in the Open University's MBA programme, a notoriety at which Doughty pulls a wry face. "It was a classic story," he says. "We were in a fixed cycle. We needed money to develop our market, but we needed money from the market in order to do it. In light of our immediate past history, looking for extra funding from institutional sources was, er, let us say, impractical." In the end, the only option left to Doughty and his team was that proffered with gentle insistence by the nice men from Yamaha.

Within five years of the takeover, sales on Premier brands alone had doubled. This had nothing to do with the OEM (original equipment manufacture) of Yamaha's own ranges at Leicester - "They never took up more than 30% of our capacity," Doughty points out - but it did have everything to do with a corporate reinvention for which the company's new chairman has nothing but admiration. "I read vast amounts of misinformation about the Japanese every day," Doughty notes. "In fact, their real strength is a patient and constant application to detail, an ability to say, 'Well, let's start by looking at this corner', and working from there."

Among other corners to come under Yamaha's gimlet-eyed scrutiny at Premier were up-market suppliers. "In the old days," says Doughty, "we simply accepted price rises and passed them on. In the last five years, we've been able to adopt a much more aggressive policy on price increase. Not so long ago, I received a letter from a supplier saying, 'We regret we are having to put our prices up by nine per cent'. I wrote back and said, 'Then I regret we are unable to offer you any further business', and we settled at, well, let's say x%. Do you know what amazed me? I found out later that they had sent out 2,000 letters, and only six recipients had actually gone back and queried it."

If this Oriental purchasing toughness seems at odds with Premier's old smoky-basement-blues corporate culture, then Doughty's reinvention of his company's product is more heterodox still. "This business is like motor-cars," he notes, in a metaphor designed to strike a chill into the heart of anyone with a plectrum and a ponytail. "You've got to know what colours sell - red, white and black, just like cars - and you've got to have the range. Our biggest kits, like the Premier Sigma Maple, are about the most innovative in the world, BMWs, if you like. But we've also got entry-level stuff, Ford Escorts. Tinted windows? We do black drumheads. Same sort of thing, really."

At the same time, however, manufacturing the Yamaha Y9000 series, the product of his keenest rival (widely viewed as the world's best rock drum kit), under his own roof, has alerted Doughty to the necessity of retaining brand identity in the face of his product's reinvention. "The music industry is still to a large extent dominated by personality cults," he says, "and that's dangerous."

Since the non-drumming, 59-year-old Doughty makes an unlikely pop cult figure himself, he has craftily elected to make a cult out of his firm. This he has done by circumnavigating dealers and appealing directly to customers by way of a glossy bi-monthly newsletter called Rebound. This fosters a sense of drummy clubmanship while at the same time advertising Premier's products. The last issue carried the heart-warming tale of the murder of the drummer of a German band called Die Toten Hosen (which translates, felicitously enough, as The Dead Trousers) by irate neighbours. All clients are computer-coded on a 7,000-strong UK database, there is a helpline for young drummers in need of advice and owners of Premier kits are encouraged to look upon the Leicester factory as a sort of percussive and visitable Valhalla.

All this has left Doughty in a very happy frame of mind indeed. Being seen to manufacture Yamaha's respected range of instruments has, on the one hand, done Premier's modernist credentials nothing but good. On the other, Doughty can still lay claim to Premier's "heritage, a quality that does you no harm at all as long as you don't get sentimental about it".

On the former level, Doughty envisages Premier's future culture as a hearty hybridisation of both Far Eastern and northern European ideologies. "We've probably had in microcosm the most closely-focused Japanese experience of any British company ever, and I can see both the strengths and the drawbacks of Japanese corporate methods as a result," he says. "One weakness is that they don't produce generalists. The emphasis on jirei (personal mission) is irritating as, occasionally, there is a tendency to over-concentration on detail."

In financial terms, too, Yamaha's departure has left cause for optimism. Doughty confirms that there will be "a continuing commercial association" with the Japanese firm (although to what tune he will not say), and that Yamaha's "generous and honourable" bequest of some £3.5 million in plant and machinery leaves him in a position to take on all comers. Well-placed sources suggest that dodgy year-end results over the last five years were a result of the parent company's aggressive underpricing of its own brands. Left to its own devices, Premier can do what it likes with margins. It has recently launched a new, top-of-the-market drum range, the Sigma.

As the Rising Sun sets over Leicester, it creates a rosy glow. If Doughty's reading of the Japanese economy is correct, it is a light that may become more widespread.

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