"Let my inspiration flow, in token lines suggesting rhythm, that will not forsake me, till my tale is told and done......."
In honor of the 50th anniversary of perhaps the greatest band of our times, or at least my times, I thought I'd pay tribute to the Grateful Dead in a blog. The Dead were so much more than just a band. Their influence on the business world is such a large part of their legacy. The band developed ideas and business practices that have since been embraced by corporate America. While most people know Jerry, Bobby and Phil as the heart and soul of the band as musicians, what they don't realize is that these three were anything but naive about the business aspects of the Grateful Dead. Early on in the 50 years of the Dead, they built a corporate infrastructure that included a formal Board of Directors made up of the band, road crew and others that worked behind the scenes on tickets, sales and marketing. As a result, the Grateful Dead are one of the most profitable bands of all time. Not too shabby for a band better known for their long jams, psychedelic drug exploration and loyal "deadhead" followers.
Perhaps the biggest business decision the band ever made was to allow their fans to tape their shows, surrendering a significant revenue source in record sales (yes back in those days there were no CDs or MP3s - good old vinyl). This decision was made because they believed that tape sharing would ultimately widen their audience who would in turn, spend money on concert tickets and other merchandise. As a result, they spent less time in studios making records and more time on tour playing to live audiences. From 1965-1995, the Dead performed over 2,300 shows, or approximately 80 shows a year. Just the shows from the 1990s produced close to $300m in revenue for the band.
This business philosophy has been fully adopted in most internet based business models today where firms believe the best way to raise demand for their product is to give it away. It's even become prevalent in most service organizations, including the consulting world, where clients are looking for consultants to provide some limited "pro bono" work to demonstrate capabilities before they sign longer term deals.
So how else have the Dead influenced the business world?
- They understood the importance of establishing a direct relationship with their customers (yes I hate that word - see my prior post on Customers vs Clients) or clients. The Dead were the first band to implement a nationwide mailing list that connected them directly to their followers. As consultants, we are always trying to establish a more direct connection to our clients - through directed emails, blogs, websites, thought leadership white papers, etc.
- They established an "open architecture" to their business. Have you ever been to a Dead show and experienced the vendor community in the parking lots selling everything from t-shirts and jewelry to veggie burgers. In consulting, we maintain an independent "open architecture" of vendor information that allows us to establish strong relationships with the vendors who provide software and services to asset managers. In the end, we all win through jointly working together to help solve our clients issues.
- Innovation. The Dead understood that the live concert experience was their "selling point". In order to be successful, they needed everything about the live show to stand out above and beyond what everyone else was doing in the music business. They didn't buy or lease sound equipment for shows. They built their own sound systems - famously known in the 1970s as the "wall of sound" that made the concert experience unique and beyond anything ever done before. Steve Jobs once said "Innovation distinguishes between a leader and a follower." A Forbes article written several years ago called Jerry Garcia the 'Steve Jobs of Rock and Roll'.
- Create a Business Community - yes this would be the "Deadheads" who in turn created an entire subculture complete with its own wardrobe, food, culture and rituals. In today’s business world, corporations and their customers/clients work in collaboration - think Apple and the customers who bought their products and now collaborate with Apple on apps for the iPhone or iPad. In consulting, our success is highly dependent on our ability to have our clients advocate our capabilities and service offerings. Working in partnership with our clients allows us to expand our service offerings and subject matter expertise, and in turn, deliver innovative solutions to future clients in the investment management industry.
So where am I going with all this you're wondering? Think of what your company would be like if you ran it like a Dead show. A company that works collaboratively yet autonomously and is inspired to succeed. Going to a show wasn't just about seeing Jerry and Company. It was an entire experience, the tailgate party, the Dead community, the dancing in the streets, the vendors, and the music - all shared by like-minded people. That's a company I want to work for. Who's with me?
See you in Chicago this weekend. I'll be the guy with the tie-dye Citisoft t-shirt on handing out business cards.
"Faring thee well now. Let your life proceed by its own design. Nothing to tell now. Let the words be yours, I'm done with mine."
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Chief Executive Officer. Paul has 30 years of experience providing investment management systems and operations consulting services to investment management firms, mutual fund complexes, and insurance companies. He has extensive business and systems expertise in portfolio management, investment accounting, fund accounting, and financial reporting. Prior to joining Citisoft, Paul was a partner in IBM’s US Investment Management Practice.