"As you know we have been making money for more than 40 years and our new business manager suggested that you were smart people who could help us make more money and talk about our business model. This was a surprise to me as I didn't know we even had a business model."
The suited individuals laughed nervously. The lead singer picked up his cigarette, waved at them and said, "OK, then - get on with it."
One of the suited individuals opened the proceedings. "Gentlemen. Thank you for inviting us to present to you. We believe that our organisation with its unique lean approach can help you reduce the costs of your lucrative - but expensive - world tours and introduce disciplines that are more relevant to the modern style of the music business. We have taken ideas and principles from our Financial Services business and we think you will find them relevant. Your business manager has explained to us that you have a 'Say No To Powerpoint' policy so we'll talk through some ideas and see if you want to take them further with us.'"
"We are a lean organisation and believe in lean principles - our team consists of me, Mike Smith, Lean Partner; John Jones, Partner for the Entertainment Sector; Stuart Reid, Sector Manager for Enterprise & Entertainment; Peter Phillips, Account Manager; and John Junior, Project Manager. On a day-to-day basis you will deal with John but if there is a need for catch-up, governance and progress meetings, then the rest of us will provide governance and oversight on his work. Oh, where was I - yes, lean organisation and lean principles, that's right. After a number of internal workshops, brain storming and analysis of your current business model we believe we can refine the Rock Band proposition. Typically you have got together from time to time, written some songs, practised them and then performed gigs and sold albums. In the good old days albums made money, but now it is the tours and downloads. Other clients have faced similar challenges to their business model until we helped them. If we apply our financial services to your situation what can we recommend:
He started to count on his fingers.
One: Is it necessary for you all to be in the same place to play a gig? Teleconferences & videoconferencing will allow you to essentially interact without physically being in the same place and will cut down on the travel costs and the transportation costs of moving your equipment from place to place. If you are not playing, then disconnect from videoconference and this will keep connection costs low. Some of these stadiums are so big that nobody would know the difference.
Two: If there are easy parts of your show then you should outsource them to our offshore, outsourced music centre where we have musicians who can play similar notes for a fraction of the price. We find the customer just wants the experience, to hear the notes, and this is a more cost effective way of delivering it - you can just play the tricky parts later on."
The lead singer interrupted. "What about customer satisfaction? This sounds like karaoke to me."
"Ah, yes, you need to realise that the music fan is getting more or less the same quality of experience, delivered at lower cost and you are fresher to do more 'appearances'. Yes they might not get the personal touch they would if you were physically there, but that's reflected in lower ticket prices. On the plus side there is a guaranteed, consistent level of performance, no chance of the gig starting late or a no-show by a band members," he said looking at the members of the band who were already typing into their Blackberries. "We call that the benefits of a service level agreement."
The guitar player interrupted. "Do customers really use stuff like that? Are you sure that the rock band idea is old hat? Which of your clients would do this?"
"They use it all the time. They have departments that are deconstructing teams into service lines all the time. It's a cost-efficient way of delivering the product to the end users. Some of the customers might complain, but the shareholders love it. Lower costs, less work, bigger profits. All of the banks are doing it and they've been making lots of money for more than 40 years."
"But they seem to be hated by everybody," the drummer said.
"Their customers might hate it but their shareholders love it," said Mr. Smith.
"Our fans won't stand for this. What happens when they ask for their money back?" the drummer added.
'You take out insurance against such losses. That way you earn money whether they are satisfied or not," said Mr. Smith. "What do you think?"
The lead singer stood up and motioned them towards the door. "Thanks for coming. We'll get back to you."
The door closed and he picked up the telephone and barked down it. "Get our soon-to-be-ex business manager on the line."