top of page
  • The Economist

A rocker’s guide to management

Bands are known for drink, drugs and dust-ups. But beyond the debauchery lie four models for how to run a business

In his languidly titled autobiography, “Life”, Keith Richards tells a story that captures something about the workplace culture of the Rolling Stones and his decades as the band’s guitarist. It’s 1984 and the Stones are in Amsterdam for a meeting (yes, even Keith Richards attends meetings). That night, Richards and Mick Jagger go out for a drink and return to their hotel in the early hours, by which time Jagger is somewhat the worse for wear. “Give Mick a couple of glasses, he’s gone,” Richards writes, scornfully.

Jagger decides that he wants to see Charlie Watts, who has already gone to bed. He picks up the phone, calls Watts’s room and says, “Where’s my drummer?” There is no response from the other end of the line. Jagger and Richards have a few more drinks. Twenty minutes later, there’s a knock at the door. It is Watts, dressed in one of his Savile Row suits, freshly shaved and cologned. He seizes Jagger and shouts “Never call me your drummer again,” and delivers a sharp right hook to the singer’s chin.

Rock stars sometimes seem to exist in a completely different world to our own. It is easy to forget that they, too, are subject to office politics. Watts was the drummer, and Jagger was the leader, or co-leader, of the band. It was Jagger who commanded stages around the world and took responsibility for the band’s major business decisions. But by calling Watts my drummer, Jagger had upset the delicate balance of deference and respect that sustains the relationships between co-workers in any workplace. Of course, there aren’t many offices in which the principals take industrial quantities of artificial stimulants and launch themselves into fistfights. (Imagine being the HR director for the Stones – the paperwork!) But the dynamics of an incident like this are familiar to anyone who has ever felt compelled to request that their boss get over themselves.

The notion that bands should make music for the love of it was always romantic and now seems positively quaint. Rock groups are mini-corporations (some of them not so mini). Bands such as Coldplay or Kings of Leon operate sophisticated corporate machines that are responsible for multiple revenue streams; at a recent conference, Metallica’s drummer spoke about the importance of using the right customer-engagement software. Yet the music machine ultimately depends on a small group of talented individuals working closely together to create something magical. Once members of a group decide that they can’t stand to be in the same room as each other, the magic stops and the money dries up.

If rock groups are businesses, businesses are getting more like rock bands. Workplaces are far more informal than they used to be, with less emphasis on protocol, rank and authority. Many firms try to cultivate the creativity that can come from close collaboration. Employers attempt to engineer personal chemistry, hiring coaches to fine-tune team dynamics and sending staff on team-building exercises. Employees are encouraged to share lunch, play table tennis and generally hang out. As the founder of Hubble, a London office-space company, put it, “We hope that our team will become friends first, and colleagues second.”

Businesses have also acquired a patina of rock-star glamour, particularly those in Silicon Valley. Friends who once gathered in garages to thrash out songs on guitars and drums are now as likely to get together to brainstorm ideas for apps and dream of having their success lauded in the press as they receive billion-dollar exits. Garry Tan, a former founder who now manages a San Francisco venture-capital fund, told me, “A startup is like a jam band. You need a drummer, and someone says, ‘Oh I went to school with a drummer’.” Next thing you know, your future is bound together with the people you got drunk with in university bars or played Fortnite with after school.

Successful startups have to make a difficult transition from being a gang of friends working on a cool idea to being managers of a complex enterprise with multiple stakeholders. It’s a problem familiar to rock groups, which can go quickly from being local heroes to global brands, and from being responsible only for themselves to having hundreds of people rely on them for income. In both cases, people who made choices by instinct and on their own terms acquire new, often onerous responsibilities with barely any preparation. Staff who were hired because they were friends or family have their limitations exposed under pressure, and the original gang can have its solidarity tested to destruction. A study from Harvard Business School found that 65% of startups fail because of “co-founder conflict”. For every Coldplay, there are thousands of talented bands now forgotten because they never survived contact with success.

The history of rock groups can be viewed as a vast experimental laboratory for studying the core problems of any business: how to make a group of talented people add up to more than the sum of its parts. And, once you’ve done that, how to keep the band together. Here are four different models.

FRIENDS: “We can work it out”

The Beatles invented the idea of the band as a creative unit in the 1960s. John Lennon’s and Paul McCartney’s artistic partnership enabled them to vertically integrate the hitherto separate functions of songwriting and performing. The band had no designated frontman; all four Beatles were capable of singing lead. Though Lennon was the de facto leader in the early years, one of the band’s innovations was not to call itself “Johnny and the Beatles”, as was conventional at the time. Partly because promoters and journalists found this new entity hard to grasp, friendship became central to the band’s image. John, Paul, George and Ringo were presented to the world as a gang of inseparable buddies. Their voices blended thrillingly. They cut their hair and dressed in the same style. They talked – oh how they talked – in synchrony. “We’re really all the same person,” said McCartney in 1969. “We’re just four parts of the one.”

This wasn’t just spin. The Beatles had spent years in each other’s intimate company, in Liverpool, in Hamburg, in filthy bedsits, tiny dressing rooms and bone-shaking vans. They put thought into making the friendship four-way: on tour, Lennon would room with George Harrison, and McCartney with Ringo Starr, so that the Lennon-McCartney partnership didn’t unbalance the group. In private they behaved as they did at press conferences, finishing each other’s sentences and bouncing jokes off each other. Jagger called them the “four-headed monster”.

There are sound reasons to mix friendship with business. Researchers who study workplace environments have found that employees who have friends at the office feel more motivated and generally happier in their job. When Jessica Methot, a professor of human resources at Rutgers University, investigated the effects of friendships at work, she found that those with more workplace friends felt better about coming to work and earned better performance evaluations. This she expected. But she also found that they were more likely to report feeling depleted, over-worked and lacking energy. She reckoned that was because of the emotional labour involved in reconciling the potentially incompatible roles of co-worker and friend.

When you have more close friends at work, professional conflict becomes more emotionally punishing. How do you feel when you need to inform a friend they’ll be taking a pay cut? And how do they feel? As Methot puts it, “The closer [co-workers] become, the more sensitive they are to what’s happening at work. Betrayal seems exponentially more severe.” The most problematic cases involve romantic entanglements: you can’t stop seeing your ex when your ex is a colleague. Fleetwood Mac’s turnover of personnel has been high over the years, partly because the band’s singer Stevie Nicks and its guitarist Lindsey Buckingham were lovers as well as colleagues.

Working with friends is exhilarating when business is going swimmingly, but it can be hell when things go wrong. In 2008, Garry Tan co-founded Posterous, a microblogging platform. Posterous took off like a rocket, becoming one of the 200 most-visited sites on the internet. Tan and his partner raised millions of dollars and attained celebrity among their peers in Silicon Valley. But in 2010, traffic to the site flat-lined and the founders had no idea why. He and his partner became locked in disagreement over what to do. Tan, who is scrupulously polite, finds confrontation hard. “My dad was strong willed and inconsiderate. I evolved to be the opposite.” The tensions with his friend drove him to the edge of a mental and physical collapse. For the sake of his health, he resigned from the company he had given everything to create.

By 1970, the Beatles were racked by financial, legal and personal disputes. Apple Corps, the company they founded in 1967, had become an unholy mess of money-sucking misadventures. Lennon was finding more inspiration from his new wife, Yoko Ono, than from his co-workers, and insisted on taking her into work. Harrison was increasingly frustrated with his limited role. Meanwhile McCartney had recorded a solo album, “McCartney”, which he wanted EMI to release as quickly as possible. But a new Beatles album, “Let It Be”, was also ready for release, and EMI didn’t want the two albums competing for sales. Harrison wrote a friendly letter to McCartney, on behalf of the other three, asking him to delay the release of his album. Starr drove to McCartney’s house in north London to deliver the letter. On reading it, McCartney became incandescent with rage, shouting at Starr, threatening him and jabbing a finger in his face. McCartney got his way, but the incident damaged his relationship with Starr, who said later, “I’m very emotional; things like that really upset me”.

Business disagreements were intensely personal because, for the Beatles, everything was intensely personal. What were Starr and McCartney disagreeing about so violently? A marketing plan! It was because the Beatles were such good friends to begin with that they fell out irreconcilably.

AUTOCRACIES: “I won’t back down”

Tom Petty and the Heartbreakers were formed in 1976 by five musicians from Gainesville, Florida, who had moved to Los Angeles in search of stardom. Petty was the group’s lead singer, songwriter and driving force, but the band split its income equally. Petty was talented enough to make it alone, but he loved being in a band: it gave him a sense of belonging after a fraught childhood scarred by violence. The Heartbreakers had an ethos of all for one, and one for all. By 1978 they had released two albums that sold well. Their next, “Damn the Torpedoes”, would go triple platinum and propel them into the big league. But before that happened, the band’s leader faced a tough decision.

The Heartbreakers had a new manager, Elliot Roberts, who, at 35, was already a grizzled veteran of the industry, having managed Neil Young and Joni Mitchell. The first thing Roberts did was sit down with Petty and tell him that he needed to be more selfish. “You can’t do this deal where you’re giving every­body in the band an equal cut of money,” Roberts said, “because there’s going to be a big problem at some point. You’re going to feel really bitter and used. I’ve been down this road with bands before. It explodes, and everyone walks away.” Petty listened. The days of equal shares were over.

His bandmates felt a stinging sense of betrayal. “I was furious,” keyboardist Benmont Tench told Warren Zanes, Petty’s biographer. “But you’re absolutely fucked, because these are the guys you want to play with…I wanted to play in the Heartbreakers. But it took years to accept.” Nobody left, but Petty’s decision came at the cost of the camaraderie he valued.

When I asked Zanes if Petty’s decision was cynical, he demurred. “Bands start off as exercises in us-against-the-world idealism, in which success lifts all to equal heights. The ones that don’t break up before they reach a recording studio are the ones that adjust their philosophy in order to become a business. A redistribution of power is necessary.” Petty’s decision was hard for everyone, he said. “But there they were, decades later, still together when so many other bands were on the garbage heap.”

Others have followed a similar pattern. On stage, Bruce Springsteen celebrates the ties that bind him to the E Street Band, but in his autobiography he is matter of fact: “Democracy in a often a ticking time bomb. If I was going to carry the workload and responsibility, I might as well assume the power. I’ve always believed that the E Street Band’s continued existence is partially due to the fact that there was little to no role confusion among its members.” By which he means, there is no confusion over who’s the boss.

Even at a time when flat decision-making structures are fashionable in business, some companies are successfully run as Springsteen-style autocracies. In 2009, Cisco’s then CEO John Chambers told the New York Times, “I’m a command-and-control person. I like being able to say turn right, and we truly have 67,000 people turn right.” After returning to the helm of Apple in 1997, Steve Jobs almost single-handedly wrenched the firm out of stagnation. But top-down structures can backfire. For a decade the Royal Bank of Scotland was run by Fred Goodwin, who brooked no disagreements, whether it was on the design of the company’s Christmas cards or its vast exposure to toxic loans. The bank collapsed in 2008 and the British government had to bail it out. If your company is run by an autocrat you’d better hope that they’re as gifted as Springsteen or Petty.

DEMOCRACIES: “Everybody hurts”

In 1979, Michael Stipe, a college student in Athens, Georgia, was browsing in a downtown record store called Wuxtry when he got talking to the clerk, a college dropout and amateur guitarist called Peter Buck. The two men bonded over a love of underground rock and soon decided to form a band, recruiting two fellow students, Bill Berry and Mike Mills. Thirty-two years later, their band, R.E.M., broke up amicably, ending one of the happiest collaborations in rock history.

Another regular at Wuxtry Records was Bertis Downs, a law student. An early fan of the band, Downs became R.E.M.’s legal adviser and manager. He told me that R.E.M. operated as an Athenian democracy. “They all had equal say. There was no pecking order.” This was not majority rule: “Everyone had a veto, which meant everyone had to buy into every decision, business or art. They hashed things out until they reached a consensus. And they said ‘No’ a lot.”

Underpinning R.E.M.’s flat governance structure was an egalitarian economic one. As Tony Fletcher explains in “Perfect Circle”, his biography of the band, each member received an equal share of publishing royalties, regardless of who contributed what to each song. The same was true of their recording and performing royalties – although here equal splits are normal. One notable exception to this rule was The Smiths. When Morrissey and Johnny Marr founded the band in 1982, they insisted on taking a bigger cut of income, from all sources, than the bassist, Andy Rourke, and the drummer, Mike Joyce. This introduced an instability into the group, hastening its demise after five years.

R.E.M. is one of a handful of bands that has successfully contravened Springsteen’s rule. Another is one of the biggest bands in rock history, Coldplay. In both cases, members receive equal shares of all income and have had a roughly equal say in band matters. Neither of them ever needed to fire or replace a founding member. (After R.E.M.’s drummer Bill Berry left in 1997 the band carried on for 14 more years as, in Stipe’s description, a “three-legged dog”.) If democracy worked so well for these bands, the obvious question is why it’s so rare. The answer is simple, says Jeremy Lascelles, who runs an artist-management company called Blue Raincoat. In a band, he told me, “You’re dealing with the most toxic element in human relations: ego. A musician needs a big ego to get on stage and bare their soul. But that means you can get these massive egos battling for dominance.” It is perhaps no surprise that the history of combustible musical egos is dominated by men – a situation that companies with male-dominated boards (which means most of them) would do well to heed.

Finding the right combination of personalities pays off. As an investor, Garry Tan says he probes the relationship between a startup’s founders as much as he does its business model. When he meets a team looking for investment, he is alert to hints that they are not on the same wavelength. If they are interrupting and talking over each other, he worries; if they are tuned into each other’s mannerisms and turns of phrase, he gives them a better chance of surviving a crisis. “The relationship needs to be deeper than the project,” he told me.

The democratic model depends on individual members believing that each has the group’s interest at heart, not just their own. Morrissey’s and Marr’s policy made it hard for the band’s members to trust each other; R.E.M.’s decision-making process meant they exhibited confidence in each other every day. There must also be a belief in each other’s competence. Tony Fletcher, the biographer of R.E.M., says that “usually in a band there’s someone the others think isn’t good enough, or isn’t pulling their weight.” But that was never the case with R.E.M., all of whose members were skilled in multiple ways. “Everybody Hurts”, the band’s biggest hit, was largely written by the drummer, Bill Berry.

Finally, it helps to have a shared vision of success. Coldplay knew they wanted to be the biggest band in the world; each member had the same clear-eyed ambition. Their equal income split works like equity shares: every partner has a direct interest in keeping the band together.

FRENEMIES: “It’s only rock ’n’ roll”

Charlie Watts’s forceful rebuke to Mick Jagger came at a difficult time for the Rolling Stones. In the 1980s they came as close to splitting as they ever have. Their last album, “Undercover”, had sold disappointingly. Jagger embarked on a solo career and seemed to be seeking an escape from the band, possibly because he was tired of dealing with Richards, who had shaken off a debilitating dependence on heroin only to replace it with one on alcohol. But Jagger’s solo albums flopped, and he returned to his old partner. The two came to an accommodation. By the end of the decade, the Stones were back on the road again, promoting a successful new album. They have been touring – and the money has kept pouring in – ever since.

“In bands that survive a long time, there’s often an agreement to disagree,” says Simon Napier-Bell, a manager of multiple bands, including the Yardbirds and Wham! “People who don’t get on can get on in an interesting way.” It was possible for the Stones to come to such an arrangement precisely because they were never as close as the Beatles. It’s not that Jagger and Richards weren’t friends, but friendship was never as central to their image. When it comes down to it, they are there to work.

The Stones also have a clear division of responsibilities, a necessity for startups hoping to grow into stable companies. At Facebook, Mark Zuckerberg used to be responsible for every­thing, but now focuses on the product while Sheryl Sandberg leads the business. In “Life”, Keith Richards portrayed Jagger as a cold, soulless character who cares more about money than music. But it is Jagger’s leadership of the business side of things, and Richards’s acceptance of that leadership, that has kept the Stones rolling for so long. In crude terms, Jagger is chief executive, Richards is chief product officer. Robert Greenfield, a biographer of the Stones, told me, “Mick is a brilliant businessman as well as a great singer. Keith never gave a fuck about the money.”

In the band’s early days, guitarist Brian Jones was the band’s chief creative force, but he made for an unpredictable, unpleasant colleague. In 1969, Jagger and Richards pushed him out of the group, in the equivalent of a boardroom coup. From then on, Mick and Keith took all the band’s key decisions in consultation with Watts and Bill Wyman, who left in 1993. Other band members have been switched in and out, and for the most part have not been eligible for royalties. Even Ronnie Wood, the lead guitarist since 1975, was essentially a salaried employee for decades.

Another reason the Stones have stayed together is that they aren’t afraid to fight – even if it’s at 3am in an Amsterdam hotel room. When Posterous went into freefall, Garry Tan and his partner needed to collaborate on the search for answers. Instead, they avoided each other because they didn’t want to fall out. This was partly because they were so invested in the idea of being friends. Tan later confessed that “I wanted so much for us to be great co-founders (and to maintain the narrative that we were close) that I skipped the hard work that it takes to get that relationship and do our best work: embracing conflict and resolving it.” The problem was that they had avoided any fights during the years of success. “We rarely spoke directly and honestly with one another. We didn’t stop to reflect on what he needed or I needed.” Tan now counsels the founders of the businesses in which he invests to have more open disagreements.

Ernest Bormann, a scholar of small-group communication, said that every group has a threshold for tension that represents its optimal level of conflict. Uncontrolled conflict can destroy the group, but without conflict, boredom and apathy set in. Simon Napier-Bell told me that bands who don’t fight tend to be creatively moribund. He recalled an argument between the Yardbirds in the recording studio, over whether the guitarist, Jeff Beck, should be allowed a solo. Beck felt he wasn’t being given enough room to express himself. Eventually, the others grudgingly let him have a few bars on a song called “The Nazz Are Blue”. Napier-Bell sat with the band and watched as Beck recorded his solo. When it came to his bars, Beck simply struck one note and let it bleed into feedback, all the while glowering with defiance at his bandmates. “Everything he felt was in that note,” said Napier-Bell. “It’s the highpoint of the album.”

One of the most striking differences between the Stones and the Beatles is that the Beatles split up after a mere seven years at the top, whereas the Stones are still going. One startup flashed brightly and burned out; the other established itself as a long-running corporation.

Perhaps there is a trade-off between creativity and stability. The Stones had ceased to be musical innovators by the end of the 1970s, but survived the waning of their creative powers by reaching a professional arrangement that enabled them to exploit their earlier innovations. The business they most resemble is Microsoft. The Beatles made only seven years’ worth of albums before splitting, but those albums represent the greatest body of work in the rock canon. Their emotionally intense collaboration maximised their creative potential, but made the group fragile. When Mark Lewisohn, an expert on the band, was asked whether it was surprising that they split so quickly, he replied that the real question is how such headstrong and wilful characters stayed together for so long.

Marie-Louise von Franz, a psychoanalyst, wrote that “whenever one is in a group…one has to draw a veil over a part of one’s personality.” Gains from collaboration are traded off against self-expression. Occasionally, she said, it’s the other way around: a group can become united in spirit and each individual expresses themselves more fully than they would be able to by themselves. A “superpersonal harmony” prevails. This rare condition, says von Franz, is what lies behind myths such as the Knights of King Arthur. If the rock group is a modern myth, then perhaps we venerate the Beatles most of all because they seem to embody the possibilities of perfect harmony. But in the fallen world of business, it may be better to be guided by the Stones.

Courtesy : The Economist


Recent Posts

See All
bottom of page