The Grateful Dead and Strategic Improvisation

I really don’t make this stuff up - - the March 2010 issue of The Atlantic has an article by Joshua Green entitled “Management Secrets of the Grateful Dead.” It is a very good article that focuses on the Grateful Dead’s ability to create customer value, promote social networking, and engage in strategic improvisation. You see the term “strategic improvisation” more and more in the context of strategic planning. In general, strategic improvisation, like all improvisation - - is an attempt to bring creative action to a reality that you cannot control (i.e., the action of other people) in real time.

Four ideas make up the foundation of strategic improvisation. The first is the idea that managers and leaders need to be nimble. Nothing is certain - - especially not a five-year strategic plan. Strategic improvisation involves a continuous flow of acting, learning, and planning to manage and lead an organization in real-time as the situation takes form. It is a focus on fast action and adjusting plans on the fly as the situation changes and requirements become clear. You have to be a leader that is a quick study and learner - - someone who can rapidly develop new skills and knowledge to keep pace with change, particularly as an ill-defined task or situation develops. The ability to learn quickly is your primary tool for succeeding in unfamiliar circumstances, allowing you to adjust in a fast-changing situation. The Dead were great learners - - either in the use of telephone hot lines for concert updates or to understand the potential profitability of merchandise - - they listened, learned, and acted.

The second is being spontaneous - - engineering managers are going to have problems with this counterintuitive idea. It is the key element to becoming adept at strategic improvisation - - the ability to become faster and more agile. Spontaneity is the natural tendency to act to changing events and situations. It is more instinctive than the automatic and mechanical decision making tied to a fixed strategic plan. Spontaneity is not the same as being impulsive - - it is leadership and the art of the gut feel with a touch of seeing clarity during times of chaos. How do your increase your spontaneity? Listen. Be in the moment. Be open to possibilities. Adopt a bias for action. Take risks and support others who take risks. All these attributes describe the Grateful Dead.

The third is fast decision making. The context of strategic decision making is not year three of a five-year plan - - it is real time 24/7. Most of our clients and customers measure deadlines in hours and days, not years. Customers value speed - - understand this value. Know who is deciding what. Clarify what you’re trying to achieve. Identify constraints and stay flexible. We live in an uncertain world caused by sonic booms associated with globalization - - accept and embrace ambiguity. Job instability, economic insecurity, a sense of turmoil, the fear that even when things seem good a hammer is about to fall - - these are part of a larger trend toward much greater uncertainty.

The fourth idea is the ability to extend your reach. Use networks to extend your sphere of influence - - almost every organization on the face of the planet is looking and thinking about this issue. Connect to a broad range of individuals and organizations that help you to mobilize ideas and resources so you can move quickly. Build social capital - - the sum of the resources available to a leader or manager through his or her relationships with others. Map the network. Finally, develop structures and processes that allow for the quick rearrangement of expertise to meet changing demands. In other words, improvisation managers create reconfigured networks to get work done quickly. The Grateful Dead turned Adam Smith and the theories of scarcer is better on its head. The Dead worked off the theory that if you gave songs away to 20 people, and they gave them to another 20 people - - pretty soon everyone knows you and the network then starts to drive the value proposition. Lost revenue on songs is balanced and exceeded by increased revenue for merchandise and concerts.