Though Jerry Garcia was indisputably the leader of the Grateful Dead, he was not a dictator. Instead, he shared his power, helping to institute a flat organizational model in which all members of the Dead organization were treated well and helped make crucial decisions. One of the results: extremely satisfied employees. When Jerry Garcia was asked about the power held by even the lowliest band staff, he responded, “We’re dragging them through life; shouldn’t they have some say about it?”
Management theorists today call this practice “shared leadership.” In their book on the topic, Craig Pearce and Jay Conger write that in this model, “leadership is broadly distributed among a set of individuals instead of centralized in the hands of a single individual who acts in the role of supervisor.” The concept is closely allied with flat or horizontal management structures, which strip away multi-tier layers of management on the theory that workers are more productive when they have more direct control over work and the decisions surrounding it. Distributing power in this way leads to reduced stress for other leaders, better decision making, enhanced creativity, and more successful outcomes. Still, most organizations resist this approach, insisting that “core values must be pushed from the top down” and that a diffusion of leadership power would also lead to a loss of a sense of responsibility.
It’s extremely difficult to establish a system of shared leadership, simply because rigid hierarchies are so deeply entrenched in our organizations and in our ways of thinking. But the Dead intuitively understood the importance of doing so. In their decision to give every employee—even the janitor—the power to veto decisions that affected the organization, they created a more flexible, responsive, and effective form of leadership. Band employees worked hard, remained creative, and stayed with the organization because they loved what they were doing and had a voice and a vested interest in the band’s long-term success.
Grateful Dead Business Lesson 9: Sharing leadership through horizontal organizational structures leads to better decision making and more loyal employees.
Bob Weir once recalled a time in the 1970s when promoter Bill Graham came to a band meeting and suggested that the band reorganize its business operation along more traditional lines. His ideas were roundly rejected. “Basically, he was too organized for us. We weren’t ready for even that much structure. We were a complete democracy.” The band never lost that commitment to democracy, but eventually they did feel the need to understand a bit better just how they were operating.
In 1981 they asked employee Alan Trist to create a report on band organization, an extraordinary document called “A Balanced Objective.” It was surely the first time a rock ’n’ roll band had devoted so much thought and effort to understanding how its organization worked. The document offers a revealing portrait of the values that underlay the Dead’s operation.
The report, which runs to thirty-one double-spaced typed pages, opens with an introduction from Garcia, who strikes a serious note from the start. “This report shows how we really work,” he writes. The band had incorporated as Grateful Dead Productions only “because the State of California requires that we identify ourselves as a business,” and he insists that the corporation was “a legal fiction, not a working reality.” The report was written, Garcia continues, “to free all the people in our organization from having to feel defined by what is actually an externally dictated fiction of convenience.” Instead, the report would “distinguish the different kinds of work we do” and “appreciate the parts each of us plays.”
Trist, the report’s author, headed up the Dead’s music publishing company. He also had studied anthropology at Cambridge University and functioned as what he called the band’s “in-house social scientist.” The report had been inspired, Trist writes in the introduction, by “disharmony in our relationships” that was caused by “ambiguity about responsibility for essential functions.” The report doesn’t reveal the precise nature of these frictions, but it’s clear that the Dead’s organizational model was causing problems precisely like those described by opponents of shared leadership theory: without a leader, division of responsibility can be unclear.
The Dead, though, weren’t ready to throw in the towel. In his report, Trist insists upon the “broad range of creativity that we have among us and the need to combine these resources in flexible ways.” And here we get to the heart of the matter, and the reason for the title “A Balanced Objective”: “Our work situation then needs a balance between the structural requirements of taking care of its business and the fluid needs of its overall creative process.” And this, really, is the balance that all organizations must strike—between the need for structure to get things done and the danger that such structure will stifle creativity.
The Dead, though, as masters of strategic improvisation, knew how to minimize structure while maximizing flexibility. As an example, Trist in the report takes a close look at the efforts that went into the band’s various projects in 1980, the year that marked their fifteenth anniversary. There were two double live albums (Reckoning and Dead Set), the usual live concerts, a live video simulcast to fourteen theaters, a TV special for the Showtime cable network, a videodisc, and a special concert program illustrating the band’s history. Trist carefully catalogs the enormous variety of work that went into organizing, promoting, and carrying out these highly successful projects. He emphasizes, though, that these efforts were carried out through not a hierarchical, command-and-control business model, but an ad hoc method that called on every employee’s highest talents. “To define the ‘flexible group process’ is to lose it,” he writes. “Its value lies in the spontaneity which comes from acknowledgement of it and openness to the unknown next point of invention.”
The language can be a little vague, but that’s by design. Best utilization of talent required flexibility, so that everyone could apply his or her skills in the manner that could best contribute to each particular project. “A Balanced Objective” shows that sharing leadership wasn’t easy, but that it offered considerable benefits. The Dead were willing to work at it to reap the rewards.
Selecting the right employees is key to attempting shared leadership. Charles Koch, CEO of Koch Industries, has this to say in The Science of Success: “Rogue employees who operate out of personal interest are minimized by selecting and retaining employees foremost on values and belief.” The Grateful Dead, though a world away from Koch in most political and cultural matters, would have agreed with him completely on this point. As Dennis McNally put it, “Dead employee qualifications started with loyalty, honesty, and compatibility.” Specific skills could be evaluated later; first, the band had to know you would fit in.
After the band had gone through a rough patch, Garcia asked David Parker, a fellow musician and old friend, to help manage them. “The main interest at the time for Jerry and the rest of the band was in finding someone they felt they could trust to handle their money,” Parker said. He had some business experience, but just as important, he was a known quantity. Steve Brown, who worked for Grateful Dead Records, recalled his first meeting with Jerry Garcia, whom he worshipped and desperately wanted to work for. “This was my shot. I went in there and I had everything I needed to know about the record business just nailed to the tits. Everything he could ask me, I knew I could answer it.” So what happened? “He didn’t ask me one thing about the record business.” Instead, “We talked about growing up in San Francisco. We talked about what kind of music experiences we’d both had. We talked about the kind of art we liked. We talked about all kinds of music. We laughed a lot, told some funny stories, and barely got into any kind of talk at all about record business stuff. He was checking me out and hanging with me. It was a thing really of vibing out if he could work with me out of the blue.”
That “vibing out” process was crucial. Zappos, the online retailer, is one major company that has adopted a similar process, attempting to create an environment so meaningful and so enjoyable that people will want to hang out there even if they aren’t getting paid. For this to be true, workers generally have to enjoy one another’s company, so managers focus on compatibility and shared values when conducting interviews and making decisions. The same was true within the Grateful Dead. Given the dispersed leadership structure of the band’s organization, it was important that they have a shared vision of how their business should operate.
With so much responsibility placed on their shoulders, the Dead’s road crew demanded to be treated well, and they were. Companies have long known that treating employees well is good for the bottom line, but they often don’t put those principles into practice. It tends to be firms in the most competitive industries—these days, software and Internet companies—that offer the best benefits as a way to retain the most talented employees. The Grateful Dead came to the same conclusion, but for different reasons. They didn’t offer good benefits and high pay out of concern that employees might jump ship and go work for the Rolling Stones. Instead, the Dead’s employee culture emerged as a matter of principle: everyone who worked for the band was considered a member of the family, so they deserved to have their voices heard and to be well compensated for their labor.
During the period in the mid-sixties when the band lived at 710 Ashbury, musicians and employees all made the same amount: everybody, from office workers and roadies right on up to Garcia, made twenty-five dollars a week. By the early 1970s, when the band started doing better, the employees shared the wealth. Richard Loren, a manager during this period, said the Dead were “paying their employees far more than the going rate.” Dennis McNally, who joined the crew as biographer/publicist in 1984, said that at that time there were standard salaries, according to three major divisions: office worker, crew, and engineer. He started off making the lowest salary for office workers, which was $26,000, though bonuses generally brought that up to $35,000 or so. Crew members would complain that office workers, who got to sleep at home in their own beds, got the same bonuses as the crew, who had to hump equipment from city to city. Garcia explained the philosophy: “We don’t give out bonuses for the amount of work you do. It’s because we have extra money.”
In addition to generous salary and bonuses, other policies were employee-friendly. Minutes of a band meeting in 1984 reveal that when bookkeeper Janet Soto-Knudsen was having a baby, the board approved “maternity leave… at full salary and for whatever time she needs.” After the Dead single “Touch of Grey” soared to number nine on the charts in 1987, the band entered an entirely new realm in earning, and they shared the wealth. When McNally asked for a raise, they doubled his salary. “The nineties were good,” he commented.
A number of employees earned more than $100,000 a year, and all enjoyed benefits that included a pension fund, health insurance, educational funds for their children, and a profit-sharing arrangement that involved not only tour revenues but also song royalties. Oh, and yes, during these flushest of flush years, the crew members had their own Learjet. Okay, so the jet was a little over the top, but the message is clear: the Dead did well by their employees. And remember that the band was generous by any standards, but particularly by those of the music industry, where generally bands hired crews only for the length of the tour. McNally, in his band biography, goes so far as to say, “The crew had better pay, better working conditions, and more influence on the band’s decisions… than any employees of any music group ever.”
Why did they do it? Partly for reasons of philosophy: they wanted to shake up the business world, and they believed in treating people in a human way rather than as cogs in a machine. And partly because it was practical: the Dead spent so much time on the road, and relied so heavily on their crews, that they needed professional, full-time employees who knew the band inside out to make sure the entire operation ran smoothly.
That treatment paid off. For instance, in 1994, their top-grossing year, the Dead had seventy employees and no turnover at all. Absenteeism was almost nil. Ram Rod, the crew chief, with his twenty-eight years of tenure when the band broke up, offered merely the most extreme example of employee loyalty. When the Dead hired you, you stayed hired, and you stayed happy. It is a lesson that’s finally hitting home for many companies today. Tony Hsieh, celebrated CEO of Zappos, argues that it’s “actually possible to run a values-based business that also focuses on everyone’s happiness.” The Dead proved that lesson many years ago.
By the late 1980s the Dead had become a large organization, grossing in the tens of millions of dollars annually. The official board of directors met mostly at band meetings, but once a month there was also an all-employee meeting. Everyone was present at these meetings, Alan Trist recalled, from “the lowliest cook and bottle washer, as it were, to all the band members, twenty or thirty people in the room at the same time.” And everyone’s opinion carried weight—any major decision required consensus, from every last person at the meeting.
The album American Beauty was originally supposed to feature a photo on the back cover in which some members were holding guns, but Robert Hunter protested that “these were incendiary and revolutionary times, and I did not want this band to be making that statement.” And because one “no” was a veto, they went with a different photo. “The bottom line was that if one guy didn’t want to do something, they wouldn’t do it. That was the Dead principle,” said producer Peter Barsotti. Someone could propose “this huge beautiful plan. One guy saying, ‘I don’t wanna,’ and that was the end of it. You’d resent it and really feel frustrated. But if you thought about it, that was the reason they could exist. That was the only way they could possibly go on as a group.” Hal Kant, the band’s longtime lawyer, explained the benefits of this sometimes frustrating process. “The insanity of those meetings had a certain beneficial effect, because you heard every point of view,” he said. “I don’t remember a vote—if they can’t turn around a dissenter, they don’t do it—and therefore, when they do something, they have everybody behind it. It means they don’t do anything reluctantly.” This is one of the key benefits of shared leadership: if everyone has a say in the decision, then you get complete buy-in from the staff. And with complete buy-in comes superior performance.
McNally recalled a time when Bill Graham visited a board meeting and made a suggestion. Willy Legate, though, dismissed it as “commercial.” The idea was finished. Legate was the building superintendent for the Dead. Bill Graham, millionaire and hotshot executive, had been shot down by a janitor. Weir later explained that the structure of the organization must “take into account everybody’s contributions. Not just the musicians’ or the management’s but the people who do the grunt work as well. Everybody. Everybody has to contribute as a team, and however you set up your business mechanisms, they should reflect everybody’s efforts and contributions. If they do, chances are the organization is not going to fold on itself and be diseased from within.”
The most celebrated instance of the Dead’s egalitarian spirit came in 1971, in a meeting with their record label. Having recently released Workingman’s Dead and American Beauty with Warner Bros., the Dead had two commercially successful studio albums under their belt. Now they were putting the finishing touches on a live album. During one of the regular all-employee meetings, Lesh suggested that the album be titled Skullfuck. He didn’t especially like Warner Bros., and suggested the name in part to tweak them, but the idea quickly took hold among all the others at the meeting. What better way to show the world that success hadn’t changed them? It was unanimous: the album would be called Skullfuck. The Dead had artistic control over the album, which included the title. Manager Jon McIntire called Joe Smith at Warner Bros. and told him of the choice of names. “You can’t do this to me!” Smith shouted. McIntire responded, “It’s not me, Joe. It’s all of us. We’re all doing this to you.” Which shows what Smith was up against: he didn’t have to convince one person that Skullfuck was an unwise choice of names; he had to convince the entire organization, so he asked for a meeting. “But any decision that concerned them had to involve everybody in the band,” Smith said, “and their families were involved in the decision as well, and the other people associated with them… so it was necessary to hold a meeting with all of them.”
As a result, fifty-five members of the Dead organization boarded a plane and flew from San Francisco to Los Angeles. The Warner Bros. conference room wouldn’t hold them, so Smith rented a conference room at the Continental Hyatt. Spencer Dryden, drummer for New Riders of the Purple Sage, recalled the meeting: “Everyone in the room took a turn in trying to explain to these straight guys from Warners why it made perfect sense for the record to be called Skullfuck. People had these long explanations, explaining the word on all sorts of different levels, totally serious.” Joe Smith, though, played it like a pro, convincing the band that the bad guy wasn’t him but the buyers for department stores. He asked, “Do you want to sell ten thousand copies?” The fifty-five members of the Dead entourage ultimately agreed to a change. Instead of Skullfuck, the album was self-titled, and it’s considered one of their best. To ease the pain of giving up their preferred title, the Dead got a generous promotional budget for the album, including $100,000 for broadcasting concerts on the radio. The promotions, coupled with the quality of the record, worked: the album sold far, far more than ten thousand copies; it was their first album to go gold.
Garcia later suggested that the episode was a bit of a prank. “We had a big meeting with Warners. They were horrified! They were shocked!… so we finally backed down, but it was more of a joke on our part.” In the end, the Dead had it both ways. They agreed, as a team, to insist on Skullfuck; they had a delightful time, as a team, flying to Los Angeles to meet with the terrified people at Warner Bros.; and they decided, as a team, to withdraw their demand for the troublesome title. In the end, they had it their way: they had a grand adventure, tweaked Warner Bros., and still got a gold record out of the deal.
What emerges from this story is another benefit of shared leadership: the sense of camaraderie, of common enterprise, that it produces. Traditional leadership structures sometimes produce an us-versus-them mentality, in which labor is pitted against management. In shared leadership, the “us” is the entire company, and the “them” is the outside world that attempts to thwart them. By spreading authority broadly throughout the organization, the Dead created a fierce sense of loyalty, from Garcia all the way down to the janitor. And that means that everyone gave his all to the organization.
Because of the band’s commitment to shared leadership, the crew took on a great deal of authority—not only traditional roadie duties but executive positions as well.
A few key members of the crew shouldered the heaviest burden. The former Merry Prankster Larry Shurtliff, known as Ram Rod, became the Dead’s equipment manager in 1967 and never left. Raised in Oregon’s ranch country, he was recognized as not only reliable and competent but also unassuming and honest, the ethical compass of the band. Next in seniority to Ram Rod was Steve Parish, who met Ram Rod while ushering in New York City in 1969. Six foot five and 250 pounds, Parish was large and loud and exactly the man they needed to impose a minimum amount of order on the chaos of the tour. Along with the heavy lifting, Parish also had a delicate daily task: changing the strings on Garcia’s and Weir’s guitars. He would eventually become Garcia’s personal manager.
This is how tight and loyal the crew was: when drummer Mickey Hart fired Steve Parish, Ram Rod swapped jobs with him, taking the post with the demanding Hart and letting Parish become Garcia’s guitar roadie so he would still have a job. Working for Garcia was a better job, but Ram Rod gave it up to keep the team together, because he knew that having Parish on board was good for the operation. Not a shy man, Parish was aware of his, and the crew’s, value. “We’re part of the Dead,” he said. “You really put your whole heart into the system.”
According to Alan Trist, at one point some people connected to the band suggested that they should “structure the Grateful Dead along more traditional lines,” to outsource the management and to hire crew members only when they were needed on the road, rather than keep them on salary year round. The suggestion didn’t go over well. “I remember Weir laughing. It cracked him up,” Trist said. “He said, ‘You mean somebody who doesn’t know how to plug in my amp is going to do it for me?’ ” The idea died there.
But this road crew did far more than plug in amps. In what is perhaps the most surprising instance of shared leadership, crew member Ram Rod not only handled the drums but also became a member of the Dead’s board of directors and president of the band’s corporation, Grateful Dead Productions Inc. This reflected Ram Rod’s competence and the band’s trust in him, and also provided a big boost to the crew: seeing one of their own entrusted with so much authority taught them that the Grateful Dead truly was an egalitarian organization, where everyone’s talents were recognized and their opinions valued. And Ram Rod wasn’t the only one. Parish became manager of one of Garcia’s solo projects. Lesh’s bass roadie, Bill “Kidd” Candelario, became the head of Grateful Dead Merchandising.
And it wasn’t just about skilled roadies. “Most job descriptions are narrow, and what we’re looking to do is expand, rather than narrow,” Garcia explained. “Rather than thinking of your job being this, let’s open it out to this. Why do you only want to define yourself as a person who does only this, this, and this? You know what I mean? And why should your job be less than you are? If your contribution can be greater, then what we’ll do is invent a reason for it to be greater. Dig?” Most corporations don’t “dig,” but they should. The Dead actually put to work the ideas embodied in their “Balanced Objective” report. They minimized structure, downplayed job descriptions, and asked everyone to pitch in however they could best contribute. The Dead’s success speaks for itself. Other companies, by chopping back their thickets of hierarchy, could experience similar success. As Mickey Hart said, “Nobody is anybody’s boss.”
“What made the Dead so great was their willingness to cooperate,” Garcia biographer Blair Jackson wrote. “Although everyone adored Jerry’s solos, the thing that made him such a magical player was how well he blended in and cooperated with the others.” Though referring explicitly to music, this isn’t a bad way to describe employee empowerment. Both management and employees must alternate between following and leading, in order to deal with unexpected situations. By sharing leadership, and flattening the organizational chart, the Dead opened themselves up to success.
Recent studies of shared leadership have found that it flourishes in an environment that nurtures a sense of shared purpose, social support, and employee voice. This perfectly describes the atmosphere the Dead fostered. “Wisdom is where you find it,” Garcia once said. “Every point of view at its very worst will see something that you don’t see.” That, in a nutshell, is the guiding spirit of decision making within the Grateful Dead organization.
It should also be the guiding spirit of every organization. When you listen to every voice, everyone is empowered, and everyone takes responsibility for his or her own actions. When employees have power in the process and a stake in the outcome, they are much more committed and successful. When people know that their ideas count, they grow more loyal to the organization, work harder, and contribute better, more creative ideas.
Best of all, it works. “It doesn’t work like General Motors does, but it works,” Garcia said. “And it’s more fun.”