Category: Business Management

Jeremy Larochelle, MBA’s insights into business management from his time both “in the trenches” and in the books.

Ask Questions – You May Uncover More Than the Answers

Jeremy Larochelle

 

 

I have a new employee who is doing a wonderful job picking up all the nuances of advancing music talent for a cruise ship, which if you don’t know, can be quite intimidating. This is because, in addition to the regular parts of advancing a band for the stage, we also have to deal with the complex intricacies of moving talent around the planet. We constantly navigate the challenges of passports, visas, and the border agents of multiple sovereign nations. If that isn’t enough, we have to follow the rules and document policies set forth by the vessel to make sure our talent can board without issue. In short, it is a lot to learn… especially for someone brand new so it is no surprise that my new employee has a LOT of questions.

 

About a week into our time together, she began apologizing for all her inquiries. She was relieved that I didn’t consider her questions an imposition and quite surprised that I saw them as a blessing in disguise. You see, I (and most of my team) have been on auto-pilot for the past year or so. We have fallen into a nice groove and business has been operating rather smoothly. It wasn’t until our newbie started asking questions that I realized things weren’t operating as smoothly as we thought. Her questions poked holes in our processes. They revealed areas of opportunity to tighten up our operations, streamline our workflow, and make our lives easier in the long run. I went on to explain that with her being new to the game. It gave us an “in” to ask questions across the various departments with which we collaborate. If I, someone with four years in the company, ask a question. I would likely get a less in-depth answer from the recipient. Similarly, if I, a leader in the company, asked a coordinator a question. That person may be hesitant to give me the real story of how things go down “in the trenches.”  Now, if a new person reaches out to those same individuals. They will likely get much more elaborate answers because people love to help. They may also get more truthful answers about how the process is “actually” being done. Both of these responses help us find gaps in our process and are perhaps more valuable than the question itself.

 

One of the greatest minds to ever walk the planet – Marcus Aurelius explained in Meditations. There is nothing so bad that we can’t make some good out of it. We can treat every problem as an opportunity to practice virtue.  While he was focused more on doing the right thing when faced with challenges, the lesson can also be applied to many of life’s everyday moments including one where a new employee is trying to learn their job. Sure, they are facing the “problem” of learning how business is handled but they also hold the “opportunity” to turn that same problem into a grand benefit for the collective whole of the company.

 

So, “YES!”  Ask questions. Not only do you learn by getting your questions answered. The educator is forced to explain the process and in doing so. They will likely learn something as well.

 

 

Micromanagers Kill the Future of a Company

Jeremy Larochelle

 

Micromanaging is one of those business buzzwords. I would say we collectively agree it is a bad thing. Ask anyone if they are a micromanager and they will likely say “Not me.” Yet, the internet is loaded with article after article on the subject mostly focused on how it impacts the employee… but what about the leader?  Is micromanaging bad for the ones engaging in micromanagement?

 

The short answer is “yes.”

 

I have worked under my fair share of micromanagers and non-microleaders alike. Theoretically, I researched a pile of case studies in Grad school on companies that failed due to the phenomenon. So, today. I want to explain why this practice is also terrible for the leader. To help illustrate this point, I would like to share the infamous four quadrants from Stephen Covey’s The 7 Habits of Highly Effective People – an awesome read any business-minded person should digest.

 

Stephen Covey Quadrants from his book The 7 Habits of Highly Effective People

 

If you are a leader, you want to live in Quadrant Two (or as I tell my team “I live in the future.”) This isn’t an excuse to get out of the daily grind of work so you can daydream about where the company will go and how rich it will make you. No… no… this is the key to long-term success. To illustrate, let’s say it is only me (the awesome leader) and my employees.  We both know we do not want to exist in Q4. We also know that Q3 is a cost of doing business in any work environment where there are distractions galore (have you used Slack?) so we accept it but try to mitigate living there as much as we can. My goal as the leader is to exist in Q4 and I want my employee to exist, as much as possible, in Q3. With that, we create a nice Venn Diagram.

 

Leadership Venn Diagram Using The Four Quadrants.

 

 

With this, we see that the employee is living in the “present” and I am living in the “future.” The overlap represents how we combine to propel the organization forward. I lean into the present to support my employee, learn from their pain points, and capture what they do well. My employee leans into the future to help me establish long-term solutions to our collective challenges. If we maintain this relationship, we will ultimately chip away at many of the issues that create crises and pressing problems in the short term and as such we will see fewer and fewer daily fires over time. This will free up the employee to take on more beneficial work for the company while also allowing the leader more time to focus on big-picture items like capital acquisition, strategy, and partnership building. All items that grow businesses exponentially.

 

Here’s the kicker. This rarely can be done if the leader is a micromanager because when you micromanage. You choose to live in Q3 with your employee. You have abandoned the long view of the business and this creates a snowball problem. Those daily fires continue to burn because nobody is focusing on how to extinguish them at the source. The leader now has less time to focus on the future and finds themself setting up camp in Q3 to solve these daily problems. Likely asking themselves why their employee can’t get it right. The immediate problems persist, but now, with the leader evicted from Q4, the macro-strategy of the business begins to suffer and before too long it is left with both long-term and short-term problems and a future in jeopardy.

 

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Numbers: The Arch-Enemy of Feelings

Jeremy Larochelle

 

 

I currently manage the entire music program for a global brand. As part of my duties, I am responsible for the direction of background music creation for over 30,000 tracks that are cycled monthly across our properties. These tracks are organized in playlists that fire throughout the day to support the experience of each venue. On occasion, we have customers complain that the music is wrong, they would rather hear “their” favorite tunes, etc.

 

… and this is where the fun starts.

 

In an experience-based business, employees can become overzealous in meeting the needs of each and every customer, and with that, they occasionally make a decision to impact one customer without thinking about the others in the group. This is where math helps us find an answer.

 

I was recently in a packed venue of 300 plus. I watched as one customer approached the host demanding they turn the music down “now.” I chose this time to sit back and watch what would unfold. The host turned down the music for this one customer and almost immediately the vibe died. Butts stopped moving in seats and people (including staff) who were dancing around stopped. I decided to step in and offered my take. I started by asking the host how many people were in the room, which was 300. I then explained that we just adjusted the music for less than 1% of the population. You could see the lightbulb go off in their head.

 

Unfortunately, this happens far too often. Especially in service-based businesses where we are bombarded with the famous “the customer is always right” mantra. In all honesty, that phrase should be “the customer(s) are always right.” Very few of us work in a 1-1 business. More often we work in a 1-many business. Adjusting your business or experience because one person screams the loudest is not a good course of action. Sure, you should weigh their opinion. Even share it with the team afterward for review. However, for every one person complaining. There is likely one who is happy, which was the case in my example where shortly afterward another customer walked up and asked us to turn the music up.

 

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Are We Facing a Post-Pandemic Concert Venue Consolidation?

Jeremy Larochelle

 

Small concert venues teeter the line between a vital music industry need and a profitability challenge for their owners. They are a keystone to the entire music industry serving as the laboratories where artists hone their skills and are instrumental in building and empowering fan bases that will help push that talent up the pipeline to bigger spaces. Yet they operate within a risky business model that is loaded with unpredictability due to the status of the artists they support and the caps on their income streams.

 

There is no doubt that the major live event brands such as Live Nation and AEG understand the vital importance of smaller venues for their long-term strategy. They need these establishments to survive so future superstars and their fan bases can be cultivated to the point that they can fill their larger (and more profitable) amphitheaters and stadiums. Before the pandemic hit, Live Nation was on a $20 million-plus spending spree in Southern California including the acquisition of Spaceland Presents and their roster of small venues such as Echoplex, the Echo, and the Regent. Pre-COVID, both AEG and Live Nation were actively shopping the smaller cap space with every tool at their disposal.  Their strategies included buying out smaller promoters, partnering with established venues, exclusive promotion deals, and perhaps the most strategic.  Selling and installing their ticketing services into these independent venues, which not only provides the majors with revenue but a treasure trove of data to help focus their future investment decisions.

 

Most independent owners will tell you they do this for the love of music and when you analyze their basic business model. You will quickly surmise they aren’t lying. Profitability is difficult in the under 1,000 cap space. The smaller audience size means that the fixed cost per person is higher. This impinges on the variable costs per customer and leads to reduced profitability per show. Add in the fact that the acts at this level are still building their fan bases and owners face the very real possibility that they will not reach 100% occupancy on a regular basis. This lack of regular profitability leads to less money in reserves for slower times and very little protection from systematic risk such as a pandemic that forces them to close down indefinitely.   We have been witnessing this playout since COVID hit. By June of 2020, 90% of Independent Venue Owners said they would need to close within a few months without government help to sustain their businesses. Many are ecstatic that the US Government could provide much-needed relief soon, but this help may (unfortunately) be too little too late. Especially if there are no further rounds of funding coming down the pike.

 

Smaller cap venues simply do not have the economic resources to support reduced capacity, increased testing and sanitization protocols, state and local shutdowns, and weary public. Unfortunately, this means that we will likely continue to see many of these spaces shutter their doors into 2022, and while that is bad news for fans, independent owners, and the free market. It is a HUGE opportunity for well-positioned majors such as Live Nation and AEG.

 

In the words of Baron Rothschild, “buy when there is blood in the streets.” Unfortunately for the live concert industry, very few are positioned to heed the Baron’s advice. Both Live Nation and AEG have the infrastructure and financial reserves to withstand the COVID pandemic. While LN has a serious advantage thanks to their stock market status. A public company can secure financing through numerous debt instruments outside of typical lenders such as selling bonds or by releasing more shares. They can also renegotiate existing loans more easily thanks to their massive liquidity and the horizon-focused mindset of their investors.

 

Both companies have already reduced their workforce and cut spending at unprecedented rates due to the pandemic. And while this is difficult to swallow now, it does pose the opportunity for them to return to service much leaner and potentially free up capital to allocate towards future growth in the strategically important small-cap market. Add in the fact that both have troves of ticketing data which can be cross-analyzed against economic stricken hotspots, prime tour markets, and real estate prices and we are left with a large probability for future consolidation of the small-cap venue market.

 

There are a few saving graces for independent venue owners.  One is the creation of the National Independent Venue Association (NIVA). This organization burst onto the scene and was key in lobbying the US Congress for relief.  They will need to remain vigilant post-COVID and shift their focus from relief to the defense of a free market for the live music industry. Another comes in those with a true passion for live music.  Be it owners, managers, fans, or even leaders at the helm of these majors. We need people who understand that music was never meant to be corporate. It was meant to be raw, emotional, messy, and a little bit scary.  Only then will the magic present itself.

 

My New Gig

Jeremy Larochelle

 

I am sure many reading this would agree 2020 has been quite challenging. It has been a crazy and (at times) exhausting year. Personally, things have been a bit more hectic as I relocated from AZ to FL to start my new gig with Virgin Voyages as their Manager – Music Production & Operations.

 

The cruise industry was not on my radar when I was looking for the next chapter in my career. Having worked on ships as a musician and later operating as a booking partner for all the major lines. I just didn’t feel that the cruise industry aligned with my goals. I was looking to create something new in the live music industry and in my opinion that doesn’t happen too often at sea. But when I came across the gig listed for Virgin Voyages it caught me as different. I felt compelled to apply and I am lucky that I did.

 

My enthusiasm to hit the high seas quickly elevated as I made my way through their interview process, spoke with their team, and learned about the Virgin culture. If you don’t know, Virgin got its start as a record club on the streets of London.  Shortly after, they opened a recording studio called The Manor, which morphed into a record label. Their first release Tubular Bells by Mike Oldfield would eventually become the theme for the 1974 classic The Exorcist. In 1977, Branson himself convinced The Sex Pistols to join Virgin and together they dropped a piece of Punk Rock history called Never Mind the Bollocks, Here’s the Sex Pistols.

 

When you join the Virgin namesake you quickly witness the correlation between their early days as a record label and what the (dare I say) conglomerate has become today. One where it doesn’t matter if you create progressive cinematic rock like Oldfield, screamed for anarchy like Johnny Rotten, or are made up of an eclectic group fronted by an openly Irish gay man like the Culture Club. If the product is good and you care deeply about it, Virgin has your back.

 

And so here I am. A Virgin employee getting ready to help launch our first ship – The Scarlet Lady with two more visible on the horizon. I am surrounded and supported by some of the most driven and intelligent cruise and non-cruise people in the game. The excitement of what we are creating is powerful. It has motivated me to reclaim my passion for music in ways I never thought the cruise industry could provide.

The Email Operations Killer

Jeremy Larochelle

The Email Cc’ combines a benign appearance and exponential results that can swallow-up the average office worker’s day. Let’s take a look at why the email Cc’ should come with a warning label much like a pack of cigarettes.

 

If I were to email an employee, they would likely reply. That is (at a minimum) two emails.

 

Not too shabby.

 

Consider instead, I “Cc” two people on that email. This increases the likelihood that a number of different exchanges could result. Cc’d party one (1) could email the employee directly. The employee could email Cc2. Cc2 could email the whole group… the list goes on and on. To calculate the number of potential exchanges we need to utilize the permutation formula from the mathematical study of Combinatorics.

 

To calculate the permutations of potential interactions between the sender, receiver, and the two “Cc’d” parties we will apply the permutation formula Four choose Two (4!c2!), which is 4×3 or 12. We then need to add four since each entity can also email the entire group. This results in 16 possible permutations.

 

Whoaa… those two Cc’s just increased the email chain potential interaction by 700%.

 

Imagine, a few days ago, I received an email with thirty plus Cc’s and I know I am not the only one swamped in electronic correspondence. Just look at what Harvard Business Review reported:

 

“The average professional spends 28% of the work day reading and answering email, according to a McKinsey analysis. For the average full-time worker in America, that amounts to a staggering 2.6 hours spent and 120 messages received per day.”

 

For many, the Cc’ seems so innocent and that is where the problem starts. We add our bosses to that quick response to a client to show them we are on it. We Cc’ Sharon in accounting, because it seems like the right thing to do. We may even Cc’ other members of the client’s team since they always include those people in their emails anyway. And why wouldn’t we? It takes barely any time to include them in the chain and it doesn’t cost us anything.

 

Or does it?

 

Harvard Business Review’s article demonstrates that this afterthought can be detrimental to your entire operation. I contend that much of those 2.6 hours per day spent working on one’s inbox can be attributed to the overzealous use of Cc’s in many organizations. We already demonstrated that four people on a chain can result in the potential for 14 additional email interactions. Add two more on the Cc’ line and the total potential interactions jump to 36. Now consider that HBR’s research tells us that it takes, on average, either 15-30 seconds for someone to read an email or three-seconds to delete it. Then, it takes that individual another 64 seconds on average to return to their normal state of work. It doesn’t take rocket science to figure out this is an unsustainable practice.

 

Sure, we are not reading every single email we are Cc’d on and it doesn’t take many of us 64 seconds to return to work after reading every email. These are just averages. The point of this article is to demonstrate through sheer math just how dangerous those Cc’s can be.

 

Use them wisely my friends.