The Grateful Dead as strategic managers

The March 2010 issue of The Atlantic features an article called “Management Secrets of the Grateful Dead.” It’s a great read, especially the second half, which tells of the band’s innovations in organization, fan loyalty, and, perhaps counterintuitively, creating value by freely giving away their product. The success of these measures seems self evident: the Dead were “one of the most profitable bands of all time” and almost singlehandedly created an entire product category, jam bands. As a result, the article recounts, the Dead are replacing companies like Southwest Airlines and GE as management training examples of strategic innovators.

As good as it is, to me the article conjured an unlikely vision of the Dead as business men in hippie drag self-consciously making strategy decisions that altered the marketing landscape. I agree that the Dead took the actions cited on purpose, but I believe core product, not marketing strategy, consumed the band’s energies during its formative and peak years.   Could it be that their innovative market strategies grew organically from a quality product, where quality included the entire fan experience?

I hope those teaching Grateful Dead management include this:

  • Develop and maintain a strong product
  • Risk everything to make the product top quality
  • Perfect every detail of the customers’ experience

Develop and maintain a strong product

Given their image, it is easy for non-fans to lose sight of the fact that the Dead were good at what they did.  While one could argue aimlessly about how good they were, they certainly didn’t suffer the unevenness of musicality of some rock ‘n’ roll bands, and they proved it live most days of any given year.  Phil Lesh’s memoir recalls the words of Dizzy Gillespie, passing by an outdoor concert in the late ’60s: “Those cats can swing!”  Lesh himself was a student of jazz and then avant garde composers like Stockhausen before joining the Warlocks, as they were first named.  Mickey Hart was and remains a student of primitive percussion. According to Lesh, Jerry Garcia learned to play the pedal steel guitar in a matter of weeks, quite an accomplishment for an instrument that requires both hands, both feet, and knees to control.

They applied these skills in a joyous, educated, and well-crafted way that reflected musical practice, discipline, and breadth, gluing songs of separate genres together with rocking transitions that frequently dissolved into organic free jams, only to come back together somewhere entirely unexpected.  Even beyond their widely varying originals, their diverse covers were an encyclopedia of mid-twentieth century folk/pop, including Harry BelafonteMerle HaggardBuddy HollyMarty Robbins, and many others.

Risk everything for top quality

Early on the members of the Grateful Dead were steadily less satisfied with the quality of the then-prevailing live sound technology.  Their dissatisfaction peaked in the early seventies, when, according to soundman Dan Healy, they sunk “90 percent of their total earnings” toward building a sound system so that their faithful could “go to the show and hear the heavenly choir, so to speak, through the heavenly sound system.”  Their sacrifice to quality was such that “there were times when we spent the money on speakers and nobody got paychecks, from Jerry on down.”

The dream emerged as the Wall of Sound, a behemoth sound system that “took four semi-trailer trucks and more than 20 crew members to haul and set up.” While the wall of sound itself became too costly to lug around with the fuel crisis of the mid seventies, the Dead retained top notch sound quality after its demise, and its technical innovation remains with us today.  For example, the wall of sound introduced the practice of mic-ing each instrument separately, enabling the sound engineer to deliver a live show with the balance of a recording – standard practice today but revolutionary at the time.

Perfect every detail of the customer’s experience

The Grateful Dead were central to the Haight-Ashbury hippie scene in the sixties, a culture that embraced “Eastern philosophy, championed sexual liberation, promoted the use of psychedelic drugs which they felt expanded one’s consciousness, [and] used alternative arts, street theatre, folk music, and psychedelic rock as a part of their lifestyle and as a way of expressing their feelings.” (here)  Hippie culture came together in “happenings”, free form gatherings “during which music, psychedelic experimentation, a unique sense of personal style and … light shows combined to create a new sense of community”.   The focus of the happening was on the totality of the experience, bringing all elements together to join the participants and spectators (in as much as there was such a distinction) into a single mind.

As freaky as all this sounds, the happening’s focus on the shared gestalt surely fostered the Grateful Dead’s attention to audience experience.  I saw the Dead only once, but it was an outstanding show. Every detail seemed to have been choreographed for the experience of the listener.  The sound was big but not loud and every nuance was clearly audible. Stage and house lighting were perfect. Security was ubiquitous, proactive, and polite.  No detail interfered with band/audience community. Needless to say the Dead rocked the house.

Sadly, it couldn’t last forever.  A reviewer of Lesh’s book recounts the decline that started during the late eighties as drug-related health problems, constant touring, the changing nature of their fan base, and the sheer weight of their growing organization bore down on the band. It seems every long, strange, trip has its long strange decline – and perhaps there are management secrets there as well.

Leave a Reply

Your email address will not be published.