Everything I Know About Business I Learned From the Grateful Dead (Book Review)
Author: Barnes, Barry
Publisher: Hachette Books, 2011. 222 pages. ISBN: 0446583804
Reviewed By: John Hollwitz, PhD, Fordham University
A longer, stranger trip than we knew.
Barry Barnes’ Everything I know about business I learned from the Grateful Dead is designed to catch the attention of anyone browsing the business shelves of the local or virtual bookstore. What? The Grateful Dead as a best practice business? Is he kidding?
He is not, and you’d need a bigger curmudgeon than I, if you could find one, to disparage his hugely affable and intelligent business case study of the iconic rock group. “Rock group” may be a misnomer. The band transcended categories, and so does the book. The Grateful Dead was other than or different from a “rock group”; Barnes has written something unlike any mass market business book which I can recall. He describes a hugely successful business model unprecedented in its own time, out of conformity to what one discovers in so many of the management texts on which we usually rely.
The book is a grounded theoretical analysis based upon the voluminous evidence of the Grateful Dead’s business operations. Barnes identifies ten emergent themes which form his structure. Some of these themes are highly novel (“master strategic improvisation,” “share your content,” “create a business tribe,” “share your intellectual property,” “insource and learn do-it-yourself business”). Other themes sound like the bromides which fill the contents page of so many other business books (“be kind to your customers,”’ “innovate constantly,” “transform through leadership”). But there is nothing bromidic about the practices behind these ten principles in Barnes’ treatment of the Dead’s business model.
The book begins with a foreword by John Perry Barlow, a Grateful Dead road manager and sometime songwriter who provides a background against which Barnes shows how the band flipped traditional assumptions about profit and value. Barlow claims that the Grateful Dead was a business suited to an information economy and that the information economy nullifies a key premise of classical economic theory, that profit depends on managed scarcity. The Dead behaved as though the opposite were true, that success can come from dissemination, the opposite of scarcity, proliferating product through multiple distribution channels at reasonable prices and sometimes even for free. Barlow asserts (and Barnes agrees) that the Grateful Dead discovered a different value proposition. The product is not the music and not even the band. Their product is the audience. Belonging to that audience is their brand.
Barlow convincingly elaborates upon this assertion. The Grateful Dead achieved superstardom by tossing the textbooks and inventing a new notion of management at a time when the rock revolution of the 1960s was calcifying into a mass market, multinational megabusiness. The Grateful Dead organization eschewed traditional strategy and adopted “strategic improvisation,” combining planning and operations into a single construct to be applied to highly fluid and uncertain situations. The band immersed itself in such situations by withdrawing from traditional techniques of record production and distribution. There aren’t any textbooks that told them how to do this. Barlow shows that the musicians, staff, and road crew were highly decentralized, long on flexibility and short on structure. Years before Google, the Grateful Dead took seriously a simply stated mission of doing well by doing good, creating community with a strong culture of social value and individual dignity. This culture drove their structure (such as it was) and guided the key decisions in their operations.
Barlow points out that the band’s performances were fundamentally improvisatory. He seems inclined towards the position that their improvisation is distinct from what has developed in jazz. In this I believe him seriously mistaken. But his larger point is that the Dead’s performances, the mainstay of their presence to their customers, were isomorphic with their business plan. The Grateful Dead deliberately disrupted routine. Partly this grew from the result of their distrust of the recording establishment; partly it grew from creative impulse. They were not risk-averse and saw “failure” as the price tag for ultimate improvement. Their minimalist structure fostered creative ambiguities which suited a flat organizational structure and highly autonomous teams. The Dead allowed all stakeholders in the enterprise a critical and sometimes equal share in strategic and operational decisions, from the musicians to the janitorial staff. The money was always secondary. Guitarist Bob Weir enigmatically said that the only point of the money was to permit the band to play for free. It did no such thing in part because the Dead’s practice seemed design to enhance community and to minimize traditional profit. Alone among the mega-bands of the time, the Grateful Dead deliberately restricted revenue by capping ticket prices and refusing the corporate sponsorships which became increasingly common in live concerts over the years of their presence at the center of the stage. In addition, Barlow shows that the band invested an enormous amount of revenue into innovations in sound systems, customer service, talent management, and lighting. They were a successful business, but the success was on their terms, and their terms were decidedly post-modern.
Barlow shows that the Grateful Dead were innovators in the industry for marketing a wide range of paraphernalia which remain today a significant source of revenue. Even here they took the high road, which meant restricted income. They insisted on high quality products, fair pricing, and exceptional (expensive) customer service, all directed to a sense of community. They relied on what we laterally call “viral” marketing. Paradoxically, however, the Grateful Dead substantially gave away their music and treated their merchandise trademarks as highly negotiable. The Dead were famous to some and infamous to others (chiefly the music industry) for encouraging audience taping of their performances. Performance taping wasn’t new to the Grateful Dead; it has been occurring in music, especially in the jazz scene, for decades. The Dead, however, were unique in their response to audiotaping and the free exchange of the results among the international members of the Dead community. They saw it as perhaps the most important driver of their success and encouraged it so long as the recordings did not become centralized in what they regarded as a piratical corporate structure. They even established separate seating sections for tapers. Their approach directly contradicts standard practice in the music industry. It makes sense only if Barlow is correct in his two central theses—that their product was a community of listeners and that music dissemination, not scarcity, can be the heart of the value proposition.
“The product is not the music and not even the band. Their product is the audience. Belonging to that audience is their brand.”
Barnes, professor of management in the Huizenga School at Nova Southeastern University, elaborates on these and other counterintuitive practices in fluid, informed prose. Though clearly a fan, he is not uncritical. There are things that the Grateful Dead did not do well. For example, their decentralization forced them to navigate finely between structure and improvisation and they did not always get it right. Jerry Garcia denied that he was the leader of the enterprise although ultimately he had to be. But overall, Barnes exposes the enterprise as a wonderful experiment in organizational counterculture, a best practice for an economy that was only breaking the horizon during the band’s career.
Besides serving a general public, the book is a rich case story for academic courses in organizational behavior and management essentials (where I have adopted it to enthusiastic response). The story behind the Grateful Dead experiment is compelling, informative, and entertaining.
John Hollwitz is professor of management systems and University Professor of Psychology and Rhetoric at Fordham University.
Editor's Note: You may wish to visit the Grateful Dead Archive Online, hosted by the University of California—Santa Cruz. The website boasts “thousands of images, artifacts, and materials,” and encourages fans to upload their own Grateful Dead memories, following the band’s “participatory spirit.” For free Grateful Dead music, you can visit the Grateful Dead collection.