In 1969, while working for IBM, I listened to my first Grateful Dead album. I didn’t much like it. About five years later I opened a record shop, Barry’s Record Rack, in Kansas City, and also became a DJ on an alternative rock station. At the insistence of some of my listeners and customers, I began to spin Dead albums more often, and then went to my first show, in Des Moines, Iowa, in 1974. I could appreciate the band more, but I still didn’t really get it. As Jerry Garcia, the Dead’s lead guitarist and spiritual leader, once put it, “The Grateful Dead is a lot like licorice. Some people like licorice and some people don’t. But the people who like it really like licorice.” Over the next few years I developed a taste for Grateful Dead licorice and began to really like it. I went to shows when the band came through Kansas City, and soon I started making short trips around the country to see two or three shows at a time. I even became a “taper,” recording shows surreptitiously—it was still officially unsanctioned at the time—and trading them with other fans around the country.
By the early 1980s, I had started working for John Deere, and my commitment to the band was growing. Despite stereotypes of the band’s fans as dropped-out hippies, the Dead have always had many fans in the business world, people who were as comfortable in a suit and tie as they were in tie-dye. Even so, I saw the Dead and my corporate job as two distinct parts of my life. The band, though, had one more major surprise in store for me. While watching the Grateful Dead play at the Greek Theatre in Berkeley, California, in 1985, I came to a realization: My two personae, Deadhead and businessman, weren’t terribly different after all. It suddenly became clear to me that the Grateful Dead had some important lessons to teach the business world.
That realization changed my life. Tourheads, a small group of fanatical Dead fans, were famous for quitting their jobs and following the Dead for an entire tour. I decided to do something similar: having worked for companies such as IBM and John Deere for two decades, I quit my corporate job to start a serious study of the business legacy of the Grateful Dead. I earned an MBA and a PhD, using the Dead as a case study in organizational change, then began a career teaching and consulting, always with the Dead at the center of my thoughts. I read all the books and articles on the Dead, interviewed members of the organization, and, of course, kept going to shows (194 in all, but who’s counting?). This book reveals the lessons I learned along the way.
When I tell people I study the business of the Grateful Dead, I sometimes get puzzled looks. It’s true that for much of their careers the members of the Dead were anticorporate and seemed downright allergic to making sensible business decisions. Phil Lesh, the band’s bassist, summed it up this way: “You could run an analysis of this business and drive an ordinary consultant berserk with the contradictions and waste in it.”
Yet despite all that, it worked. Somehow it worked. The Grateful Dead managed to become one of the longest-lived, most beloved, and top-grossing acts of the late twentieth century. Founded in 1965, the band survived for thirty years and played a total of more than 2,300 shows, nearly all with the same core group of musicians: lead guitarist Jerry Garcia, bassist Phil Lesh, guitarist Bob Weir, and the two drummers, Bill Kreutzmann and Mickey Hart. On the strength of their brilliant live performances, they built an audience and added new fans slowly but steadily, all without the benefit of advertising or much radio airplay. In 1987, when their album In the Dark went platinum and “Touch of Grey” hit number nine on the charts, the band’s career went from moderately successful to stratospheric. They became the top touring act in the country, grossing tens of millions of dollars a year, and their merchandising branch, which sold everything from T-shirts to golf balls, became the envy of the rock world. Even now, sixteen years after breaking up, the Grateful Dead remains a formidable business empire.
How did they do it?
Not by following a solid business plan.
“It’s not possible for the Grateful Dead to have a business plan,” Lesh once explained. “We don’t even plan the music.” And that, precisely, is the point. The Dead were brilliant improvisers, finding musical success in constant change and relentless variation. Those same skills lay at the root of their business success. In all of their business dealings, they adopted a strategy I call strategic improvisation—blending planning and doing while staying alert, alive to fluid situations.
By implementing a loose management style, long on flexibility and short on structure, the Dead pioneered practices and strategies that would subsequently be embraced by corporate America. They created a horizontally managed organization with shared leadership, recognizing that decentralized decision making motivated employees to produce great work and remain loyal. They adopted, long before it became trendy, a socially conscious business model focused not only on profit but also on doing good. They placed an enormous value on customer service, and understood that keeping customers happy led to greater profitability. Long before “viral marketing” became a catchphrase in the late 1990s, the Dead essentially invented the practice by allowing fans to tape live shows and share the recordings with one another. You might even say the Dead understood the world of the Internet before the Internet existed: they helped nurture a “virtual community,” the Deadheads, dispersed geographically yet deeply committed to one another; they created an interactive relationship with their fans/customers, soliciting feedback and acting upon it; and they pioneered the concept of “free,” giving away their content in one form and making money on it in other ways.
Members of the band might laugh at this list of accolades. Jerry and the boys never set out to be great businessmen and never considered themselves as such. In fact, they didn’t much care about the business side of things, so long as it allowed them to keep playing music and making their fans happy. Their suspicions of the business world, in fact, turned out to be one of their greatest advantages, as they tossed out received wisdom and reinvented what it meant to run an organization. Throughout all their ups and downs, they remained committed to improvisation and innovation, and they were never satisfied unless they were constantly reinventing themselves, their music, and their business. In today’s business climate, beset by crisis and continual change, what lesson could be more important?