Management Secrets of the Grateful Dead

The Grateful Dead Archive, scheduled to open soon at the University of California at Santa Cruz, will be a mecca for academics of all stripes: from ethno­musicologists to philosophers, sociologists to historians. But the biggest beneficiaries may prove to be business scholars and management theorists, who are discovering that the Dead were visionary geniuses in the way they created “customer value,” promoted social networking, and did strategic business planning.

Fans of the Grateful Dead are big believers in serendipity. So a certain knowing approval greeted the news last year that the band would be donating its copious archivefour decades’ worth of commercial recordings and videotapes, press clippings, stage sets, business records, and a mountain of correspondence encompassing everything from elaborately decorated fan letters to a thank-you note for a fund-raising performance handwritten on White House stationery by President Barack Obamato the University of California at Santa Cruz. Santa Cruz was understood to be a fitting home not only because it exemplifies the spirit of the counterculture as much as, and perhaps even more than, Berkeley and Stanford, which also bid for the archive, but because the school’s faculty includes an ethnomusicologist and composer named Fredric Lieberman, who is prominent among a curious breed in the academy: scholars who teach and study the Grateful Dead.

Slideshow: Treasures from the Grateful Dead Archive
Music: "Attics of My Life," performed live in Berkeley in 1994

It’s worth noting right up front the hurdles Dead Studies faces as a field of serious inquiry. To begin with, the news that it exists at all tends to elicit grinning disbelief; a corollary challenge is the assumptions people carry about its practitioners, such as my own expectation when arranging to visit Lieberman last year that I would encounter an amiable hippie, probably of late-Boomer vintage and wearing a thinning ponytail. Rough mental image: Wavy Gravy with a Ph.D.

Lieberman is nothing of the sort. A small man with parchment skin, wisps of white hair, and large round glasses, he could have looked more professorial only by wielding a Dunhill pipe. His interest in the Grateful Dead, he explained, had arisen largely by chance. In the 1960s, he studied under the noted ethnomusicologist Charles Seeger (father of Pete Seeger) at UCLA, and came to share his mentor’s dismay at the academy’s neglect of popular and non-Western music. Lieberman went on to teach a series of classes in American vernacular music and, though he held no particular fondness for the Grateful Dead, became one of the first academics to teach the band’s music, in the early 1970s.

In 1983, the Dead’s drummer, Mickey Hart, asked Lieberman to help catalog his vast collection of instruments. When the project developed into a larger study of world percussion, Hart invited Lieberman to join him on tour. “I thought it would be interesting to treat it as an ethnomusicological field trip,” Lieberman told me. For some years, when he wasn’t teaching he traveled with the band, introducing Hart to ethnomusicologists by day and attending shows by night. If you squinted hard during any number of the Dead’s most famous shows in the 1980s and ’90s, you might have glimpsed the unlikely spectacle of an ethnomusicologist crouching in earnest concentration behind the drummer, going about his fieldwork.

Lieberman apologized for not being able to show me the archive. The whole thing was under lock and key in a Northern California warehouse whose location was a closely held secreta precaution against overzealous fans’ plundering a hoard that many would regard as akin to Tutankhamen’s treasure. On March 5, the New York Historical Society will open the first large-scale exhibit of material from the Dead Archive. Then, if all goes as planned, the collection will become the centerpiece of a new campus library at Santa Cruz slated to open later this year. Among other things, it is hoped that the Dead Archive will galvanize a nascent group of scholars across many disciplines who, like Lieberman, study the Grateful Deadnot just musicologists but historians, sociologists, philosophers, psychologists, and even business and management theorists. Some have risked their academic standing in the belief that the band and the larger social phenomenon that surrounds it are far more significant than is commonly understood. Lately, the world has been changing in ways that make that not so hard to believe.

One of the first academic articles on the Grateful Dead appeared in the Winter 1972 issue of the Journal of Psychedelic Drugs, a periodical for medical professionals, and drew on emergency-treatment records to compare drug use at a Grateful Dead concert with that at a Led Zeppelin concert. (Verdict: Deadheads favored LSD, Zeppelin fans alcohol.) The popular association between the Dead and a drug-fueled counterculture did little to encourage respectable academic endeavor.

As the band’s following grew, the notion that it might have something to offer scholars, particularly in the social sciences, became somewhat less far-fetched, though still not without professional risk. In the late 1980s, Rebecca G. Adams, a sociologist at the University of North Carolina at Greensboro, who studies friendships formed across distances, noticed deep bonds between Deadheads. The bonds seemed to belie the idea, then popular among leading social thinkers, that communities based on common interest, whose members do not live near each other, lack emotional and moral depththat Deadheads might belong to what sociologists call a “lifestyle enclave,” but couldn’t possibly form meaningful relationships. Adams brought a class on tour with the Deadan opportunity, she thought, to teach classical theory while letting students study a cutting-edge contemporary community.

She became instantly famous, among a small group of scholars, and then, suddenly, among a much larger group of people. One day, without warning, Senator Robert Byrd, the histrionic and prodigiously opinionated West Virginian, gave a speech decrying what he considered an appalling decline in the standards for higher education, and cited Adams’s class as an example. Adams had unwittingly placed herself in the crosshairs of the culture wars and was beset by, among other things, an inquiry from the president of North Carolina’s state university system. Though she survived with help from her chancellor and her department head, and though the question fell squarely within her specialty, Adams was politely discouraged from pursuing her line of inquiry. “I was advised to concentrate on the more respectable areas of my research,” she told me.

Other aspects of the band nevertheless continued to invite academic examination. Musicologists showed interest, although the band’s sprawling repertoire and tendency to improvise posed a significant challenge. Lieberman says that fully absorbing the Dead’s music could take years, and he has noted its similarities with South Indian classical music, with its complex notational system and highly formalized four-hour concerts. Engineers studied the band’s sophisticated sound system, radical at the time but widely emulated today. Even legal scholars took note, some contending that the American criminal-justice system, including the courts, unfairly profiles Deadhead defendants and has, on occasion, treated fandom as evidence of mental illness.

Oddly enough, the Dead’s influence on the business world may turn out to be a significant part of its legacy. Without intending towhile intending, in fact, to do just the oppositethe band pioneered ideas and practices that were subsequently embraced by corporate America. One was to focus intensely on its most loyal fans. It established a telephone hotline to alert them to its touring schedule ahead of any public announcement, reserved for them some of the best seats in the house, and capped the price of tickets, which the band distributed through its own mail-order house. If you lived in New York and wanted to see a show in Seattle, you didn’t have to travel there to get ticketsand you could get really good tickets, without even camping out. “The Dead were masters of creating and delivering superior customer value,” Barry Barnes, a business professor at the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University, in Florida, told me. Treating customers well may sound like common sense. But it represented a break from the top-down ethos of many organizations in the 1960s and ’70s. Only in the 1980s, faced with competition from Japan, did American CEOs and management theorists widely adopt a customer-first orientation.

As Barnes and other scholars note, the musicians who constituted the Dead were anything but naive about their business. They incorporated early on, and established a board of directors (with a rotating CEO position) consisting of the band, road crew, and other members of the Dead organization. They founded a profitable merchandising division and, peace and love notwithstanding, did not hesitate to sue those who violated their copyrights. But they weren’t greedy, and they adapted well. They famously permitted fans to tape their shows, ceding a major revenue source in potential record sales. According to Barnes, the decision was not entirely selfless: it reflected a shrewd assessment that tape sharing would widen their audience, a ban would be unenforceable, and anyone inclined to tape a show would probably spend money elsewhere, such as on merchandise or tickets. The Dead became one of the most profitable bands of all time.

It’s precisely this flexibility that Barnes believes holds the greatest lessons for businesshe calls it “strategic improvisation.” It isn’t hard to spot a few of its recent applications. Giving something away and earning money on the periphery is the same idea proffered by Wired editor Chris Anderson in his recent best-selling book, Free: The Future of a Radical Price. Voluntarily or otherwise, it is becoming the blueprint for more and more companies doing business on the Internet. Today, everybody is intensely interested in understanding how communities form across distances, because that’s what happens online. Far from being a subject of controversy, Rebecca Adams’s next book on Deadhead sociology has publishers lining up.

Much of the talk about “Internet business models” presupposes that they are blindingly new and different. But the connection between the Internet and the Dead’s business model was made 15 years ago by the band’s lyricist, John Perry Barlow, who became an Internet guru. Writing in Wired in 1994, Barlow posited that in the information economy, “the best way to raise demand for your product is to give it away.” As Barlow explained to me: “What people today are beginning to realize is what became obvious to us back thenthe important correlation is the one between familiarity and value, not scarcity and value. Adam Smith taught that the scarcer you make something, the more valuable it becomes. In the physical world, that works beautifully. But we couldn’t regulate [taping at] our shows, and you can’t online. The Internet doesn’t behave that way. But here’s the thing: if I give my song away to 20 people, and they give it to 20 people, pretty soon everybody knows me, and my value as a creator is dramatically enhanced. That was the value proposition with the Dead.” The Dead thrived for decades, in good times and bad. In a recession, Barnes says, strategic improvisation is more important then ever. “If you’re going to survive this economic downturn, you better be able to turn on a dime,” he says. “The Dead were exemplars.” It can be only a matter of time until Management Secrets of the Grateful Dead or some similar title is flying off the shelves of airport bookstores everywhere.

Recently, Barnes has been lecturing to business leaders about strategic improvisation. He’s been a big hit. “People are just so tired of hearing about GE and Southwest Airlines,” he admits. “They get really excited to hear about the Grateful Dead.”

Until now, scholars who studied the Dead were limited to what was available in the public domain. Barnes sought access to internal documents more than a decade ago and was turned down. When the Dead Archive opens, he and others expect to gain many new insights, because they’ll finally be able to draw on primary source material—and there’s plenty. For years, unbeknownst to just about everyone, the band’s longtime office manager obsessively stashed away everything that came into her office. The possibilities seem manifold. “From the economics folks to the anthropologists,” Barlow says, “increasing numbers of people are going to make a pilgrimage to the archive to see how this all came together.”

When a famous author or statesman donates his papers to history, the task of studying and making sense of them usually falls to some obvious discipline. That’s not quite the case here. Even with the recent renaissance, Dead scholars are few. The bulk of the expertise lies outside the academy, with ordinary Deadheads. So Santa Cruz library officials have devised a novel approach (some would call it strategic improvisation) to curating the collection. They intend to post as much of it as possible online in the hope that Deadheadszealous social networkers that they arewill contribute their knowledge, and perhaps material of their own, to help build up the record. With the culture wars of the 1960s finally beginning to subside, the possibility for sober reflection on a charged era is more feasible than it once was. Today, the Dead are more attraction than liability. The library will seek to become a haven for the study of pop culture since the 1960s, with the Dead Archive anchoring its collection.

“Revolutionaries get vilified, and then, once they get older, they just become cute,” says Steve Gimbel, who is a philosophy professor at Gettysburg College and edited the recent collection The Grateful Dead and Philosophy. “Think of Oscar Wilde. Once they’re not dangerous anymore, it’s okay to discuss them in serious ways.”