"Engineering Management Thought of the Week" Jeff Glass

For those of you who are aspiring engineering managers AND music festival fans, this post might be particularly interesting. Hopefully it is of interest to everyone as it illustrates how we can find lessons on business and management everywhere we look.

I recently had the opportunity to attend a very popular festival in the Appalachian Mountains near the town of Floyd, VA. The Appalachians have a long history of music from Blue Grass to Folk to Country (e.g.; see http://www.crookedroadenterprises.com/) and for the past decade have hosted an outdoor music festival called FloydFest (https://www.facebook.com/FloydFestVA#!/FloydFestVA). Those of you who know me probably don’t picture me at an outdoor music festival with 14,000 of my closest friends but several things came together to make this a special opportunity, including; the artists, special interest from members of my family and the location. Thus, despite it being a bit out of character, I attended all three days of the festival (well, a couple of hours each day anyway). Headliner artists included Jackson Browne, Brandi Carlile and Michael Franti making it of interest to even those who are not hardcore music festival fans.

But more to the point, as I attended the festival I realized how many exceptional business and management lessons could be gained from observing the festival and studying its history. FloydFest is particularly interesting because it has grown from a small local venue to a national event with 14,000 attendees, seven different stages for musicians, and VIP tickets costing $600 per person (although I don’t know the exact number of VIP tickets sold, it appeared to be hundreds rather than dozens). Thus, I compiled the list below while sitting on the grass listening to music on a beautiful sunny day in the mountains. These are not new but the context is quite unique:

Develop a portfolio of products – The festival is truly innovative in its vision for the type of music that it provides. A portfolio of artists in at least two different dimensions was presented to the audience; (i) both early career artists and well established artists, and (ii) styles ranging from traditional country to reggae. It struck me that this is a wonderful portfolio but has the potential problem of being interesting to such a diverse audience that making a strong, focused value proposition might be difficult. However, the organizers understood their customers extremely well which brings me to the next point.

Understand and segment your customers – Despite the large diversity in types of music, all of the customers had one general and important trait in common. They wanted to listen to music and be outdoors. The attendees ranged from children to people in their 90’s. (I’m not making that up, one of the musicians brought a ninety-something year old onto the stage to celebrate their birthday). Thus, as long as the organizers delivered an outdoor experience with high quality music, diversifying the types of music offerings is beneficial; enhancing the experience and bringing in more customers. Of course, the organizers must be aware of any correlation between people who like the outdoors and what type of music those people enjoy. As far as I could tell, there were no classical music offerings at the festival.

Know what your customers value – This means know what your customers are willing to pay for! In reality, there were many things about the venue and the festival that were rather primitive and frustrating for those of us who were not regular festival attendees. From the food choices, to the restrooms, to the parking; there were logistics that limited the quality of these services throughout the weekend. On the other hand, the sunsets, beautiful blue sky, and even the downpour which occurred in the middle of the weekend were all unmatched. Couple this with the diversity/quality of artists and the personal feel of the venues and you have delivered great value to your customers. Even the VIP customers obviously feel that these “product specs” are more important than the logistical challenges compared to a nice concert hall with real restrooms!

Organic growth – there is certainly nothing wrong with growth by acquisition or growth by significant external investment. However, the benefits of organic growth are difficult to match in many situations. Organic growth, like the growth experienced by FloydFest from the time it was a one stage local outdoor gathering to the 14,000-person seven-stage extravaganza that currently exists, allowed for knowledge capture, flexible response to the market, and word of mouth advertising to the customer base. There are still no FloydFest signs on the road at the venue – everybody has already talked to someone about where to turn – now that is organic! And again, the organizers know what their customers value; high quality music in the beautiful outdoors (with a diversity of outdoor cultural activities for young and old alike thrown in).

Find synergies in your product lines – one of the most interesting observations about the musical sets was the obvious friendships and partnerships that existed between the artists from different locations and musical genre. Most artists I observed had another artist from the festival come onto the stage as a guest for a song or two at some point during their set. In many cases they described a long and storied friendship. This provides all kinds of benefits such as making the experience unique for the customer, ensuring that the artists themselves have a good experience, and optimizing the efficiency of the “product” by utilizing artists in multiple ways.

And last but not least…..

It’s all about the culture – Every organization has its own culture and what we saw at FloydFest was how that culture can impact customers. There is a “peace, love, joy” culture that has been cultivated from the early days of the festival and this has permeated the environment even as the venue has grown by an order of magnitude. This culture is passed down by word of mouth, PR and direct advertising. It manages the expectations of the customers as well as the performers. It probably encourages some would-be customers to screen themselves out of the event if they do not subscribe to a mellow, things may not be perfect but you will have a great time, environment: a little mud, some poor lighting, too many people in some lines, and some acts starting a bit late are all part of the experience and nothing to get upset about. After all, it’s about making music in the mountains. For the most part, the audience reaction was very consistent with the culture and a good time was had by all.

So the next time you are doing something unrelated to your business, see what lessons you can learn. Many so-called “breakthroughs” come from importing ideas across industries and product areas. It has been said: “The future is already here, it’s just not evenly distributed” (William Gibson). You might learn about the future of your business by some “outside of the box” observations of the others.