Thursday, March 31, 2011


Zilch: The Power of Zero in BusinessIf you have anything to do with the music business, read Zilch: The Power Of Zero In Business. Nancy Lublin, the founder of Dress for Success and the current CEO of Do Something takes the reader through a very organized and well thought out process of how to get more from your company with less.  Many times it’s the overlooked little things that when paid attention to, have wondrous results. 

Using a not-for-profit model to run a major record label may have prevented the labels from the decline they are experiencing.  Having worked with major labels for many years, I know that it’s not the piracy that’s killing them.  What has gradually done them in is ignoring the customers, losing site of quality music, excessive spending and having staffers and executives make decisions or indecisions just to save their jobs.  It’s no way to work. 

In the 15 years I managed bands, none of them saw a penny from record royalties.  This includes artists having both gold (over 500,000 units sold) and platinum (over 1,000,000 units sold) albums.  Making money from selling records was never part of the equation when mapping out a career path.  This is why I find it interesting that the “new” paradigm is being touted as touring, selling merchandise and licensing music.  That’s the way it’s always been as far as I’m concerned and I started managing bands in 1988.

Lublin’s practices can work for any company, but I see them as being so right for the music industry, especially major labels as they seem to have lost focus.   Each chapter closes with helpful questions that summarize what you’ve read and how to apply this knowledge. 

So many important and relevant points are covered, that it’s worthy of a long post.  The book is mainly aimed at company leaders, but it applies to everyone. 

Brand: Here’s a hard one, but so important: If a partnership doesn’t make sense for your brand and your goals, turn it down even if it means money.  Keep your brand simple and focused. Use your story. Image is everything. Bring your group together to discuss data and re-evaluate your brand. When someone buys your product what is she getting?   Answer in 3 words and do not describe the product.

After hearing Jac Holzman, the founder of Elektra Records at the 92Y, he hit on all of the above at his label.  His goal was to make available music that needed to be heard.  The original focus was on folk music.  His audience knew that and if you wanted to hear good folk music you brought the latest Elektra release, many times unheard before a purchase.  Jac spent hours each week looking for those special artists for his label and his audience.  There was a time when people bought music just because of the record label that released it.  That’s how much respect a label like Elektra garnered. 

Uniqueness:  Can your organization claim any of these?

  1. First
  2. Only
  3. Faster
  4. Better
  5. Cheaper

Lublin calls these the five.  If you can use any of these words, you’ve found an all-important niche. 

Employees:  Include every level employee in the pursuit of purpose and make sure that each division has clearly stated goals.  When goals are accomplished, it builds morale. 
Stimulate people.
Endorse communal work places.  Don’t segregate employees by job title.  Eliminate executive floors.  Segregation encourages isolation for both executives through assistants. Celebrate employees’ energy.  If the energy lies in one direction, encourage that person to pursue that path.

External Believers:  Use external believers in your company and never forget that anyone could be your brand ambassador.   This is now easier than ever with social networking.  There is no much info and music out there, it’s almost easier to rely on your old tastes than to explore something new.  No one has that kind of time.  This is why external believers are so important.  You are always going to take the word of someone/company whose taste/ideals you respect.  See Elektra Record above. Take care of your fans.  Make them lifers. Turn advocates into staffers.  They won’t be paid, but they will be out there on your behalf. 

Sales Staffers:  Everyone is a potential sales staffer in a company as well as a brand ambassador.  When I interned at MTV in it’s infancy, we couldn’t keep MTV logo merchandise in the house.  Everyone at the company wore it (I still have my red pullover sweatshirt with the yellow MTV logo) outside the office.  Everyone was so excited to be working at MTV. Everyone was a part of the company.  It was new so there was an element of winging it.  My first day as an intern, I had to go to the studio to have Richard Butler of the Psychedelic Furs sign a release for his taped interview.  I thought I had died and gone to heaven.   Everyone felt like they were contributing.  Everyone was proud to work there. 

Ex-Employees: Why have ex-employees be resentful and hateful?  They should be excited about their time at your company.  Alumni can be useful. Use an alumni relations’ director.  Make them advocates.  Think of ways to reconnect with employees, send them coupons or concert tickets or discounts.

Gratitude:  Be responsive and show your consumers and fans gratitude.  Send updates, progress reports, photos, info, etc.

Innovation:  Do the culture and processes that are in place make it difficult to come up with breakthrough approaches and turn them into real products and services? 
Open your innovation circle of trust and it will set you closer to your end user. Employees must share a sense of purpose with their colleagues.  There must be a sense of urgency. Don’t let employees wilt in their cubicles.  Create pet projects.  I know there were flag wavers at the labels, but their take on file sharing and the internet were largely ignored. 

Community: Celebrate local elements. Get the community involved.  Partner for a purpose.  Grant all-access passes.  Is your brand important to a customer?
Do more with the corporate board, have them involved; tap into their resources and knowledge.  Communicate directly with staff and have them love your purpose.

Notes To Leaders:
Say thank you.
Be Consistent.
Remember your core idea and have guidelines. 
Be relevant to your audience.
Limit tedium.
Be transparent.
Find and cultivate passionate employees.
Use fun as an incentive. 
Give good titles that make sense.

Financial Considerations:
Live in fear of overhead.
Be disciplined.
Budget multi-year.
Diversify your revenue streams. How important is this for labels now?
Barter and make it a fair exchange.  Formalize the agreement.

Bob Lefsetz said the business started to die once a label exec (Doug Morris) hired his own PR person (Ron Shapiro). It was no longer about the music. The shareholders, board members and higher-ups became the focus. Nancy Lublin is saying put the focus on building a winning, happy team (how much did people love working at WB during the Mo Ostin/Lenny Waronker years?).  Connect with your fellow employees and audience. Make sure your goals meet their goals. Don’t hide from the truth.   Use common sense.  You catch more bees with honey than with vinegar. 

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