Articles Tagged ‘Business contracts’

Business Advice from Van Halen

Tuesday, July 19th, 2011

Van Halen is an American hard rock band formed in Pasadena, California in 1972. The band has been extremely successful with over 100 hits and selling more than 80 million albums worldwide. It is the 19th best selling band/artist of all time. In 1999, the RIAA certified their debut album diamond for ten million albums sold in the U.S.

In their heyday, the band became notorious for a clause in its touring contract that demanded a bowl of M&M’s backstage with all of the brown ones removed. The story is true, confirmed by the former lead singer David Lee Roth.

Van Halen did dozens of shows every year and at each venue, the band would show up with nine, 18-wheel semi’s full of gear. Due to the technical complexity, the band had a very thick and convoluted contract. Roth himself said it looked like the Chinese Yellow Pages. A typical article in the contract might say, “There will be 15 electrical sockets evenly spaced every 20 feet, each providing 19 amperes.”

Buried in the contract, was a special clause called Article 126. It read, “There will be no brown M&M’s in the backstage area, upon pain of forfeiture of the show, with full compensation.” So when Roth would arrive at a new venture, he’d walk backstage and glace at the M&M bowl. If he saw a brown M&M in the bowl, he’d demand a line check of the entire venue.

Roth was an artist and also an operations expert. He could not spend hours checking the electrical systems to make sure that the sound and lights functioned correctly (this equipment draws a tremendous amount of power). He needed a way to assess quickly whether the promoter and stage hands were paying attention and if they had read every word of the contract. In Roth’s world, a brown M&M was the canary in the coal mine.

Business owners are very much like David Lee Roth, they don’t have the time and energy to dig into every aspect of their business. But if we set up systems to indicate that we are on the right track, doing the right things on a daily, weekly and monthly basis, the business will perform more consistently. The problems faced by most business owners, they don’t have the systems in place to drive their organization forward.

When a brown M&M showed up, Roth knew there was a high probability of a problem. The average small business loses tens of thousands of dollars every year because they don’t have a brown M&M system.

Dan Lacy
Growth & Profit Coach, Financial Strategist, Cash Flow Doctor, CEO Mentor
phone: 765-644-8887

For the last 25 years, we have helped business owners get very good at 3 things: 1) developing the flow of data to guide the business, 2) charting the course for successful growth and 3) identifying trouble before it even becomes a small irritant. If you are frustrated with the performance of your business, contact us for a free, confidential evaluation. We will send you our latest business survey that will give you a very good indication of where your challenges are. It is easy and free.

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