The following MBW blog comes from Tracy Maddux, who is CEO of AVL Digital – the parent company of CD Baby. Downtown-owned AVL is also home to YouTube monetization experts AdRev, label and artist services provider DashGo, and distribution platform Soundrop. Here, Maddux (pictured) offers some wise words, from experience, of leading a music company in a crisis, as our industry, like everybody else, remains glued to the news about COVID-19, and its effects on the global economy.
The music industry is in crisis at the moment, to put it mildly. Crises always feel awful. It always gets better. But if you’re feeling grim and distressed right now, that’s a reasonable reaction. What you do next is what will make the difference for your business and for the rest of our industry.
I’ve been through a few crises in my career as a leader of music and entertainment-related manufacturers and companies, though this one has unprecedented aspects that will challenge us all in ways we’re just starting to grasp. I’ve distilled some of the lessons I learned from crises, and I hope they’ll help support the music industry’s leaders, especially in the face of great uncertainty.
As you try to deal with a crisis, it’s good to see where you are: A crisis means having a series of not-great options, and having to choose. In 2001, after 9/11, the manufacturing company I led as COO lost its largest client and 30% of its business. We had to quickly reduce staff to remain solvent.
The terrible decision we had to make was between two bad options: Do we lay people off before or after Thanksgiving? There’s no great answer to this dilemma, just as we’re looking at a lot of tough and miserable options right now. There are better ways of making business decisions between unpleasant options, however.
In a crisis, it almost always gets worse before it gets better. That means you need to manage your own and others’ expectations and be prepared to be flexible. One example from my own career: as part of a sale in 2006, I had to do a plant closing and mass layoff, one the sellers of the company had not communicated to their employees. At the end of a terrible day, we found that someone had been murdered in the parking lot, a totally unrelated but deeply jarring incident for everyone there. We had to deal with the situation the best we could.
Thus, whatever you think you may be doing next, even if you think things are as bad as they are likely to be, be flexible. This goes for planning, too.
Even as you’re being a realist when appropriate (and likely a pessimist in private), be an optimist in public whenever you can. The people around us look to us to set an example for their conduct and attitude in trying times.
We can make huge statements with our actions, even when they don’t bring immediate gratification or praise. In 2008, during the last economic crisis, the Portland, OR-based CD and DVD manufacturer I headed as CEO and president collapsed along with the economy. I was personally on the hook for millions of dollars of bank debt. In the middle of selling the company, Portland was hit with the biggest blizzard in 50 years, the kind of weather the city is ill prepared for.
For a number of days, I picked my employees up at home and drove them to the office to make CDs. I dug paths in the snow for trucks to come and take product so we could generate enough cash to cover our final payroll. I’d then take employees home in the evening. We all did what we had to do.
When we have bad days, our attitudes and behaviors will get reflected back to us by those we’re trying to lead, often in dysfunctional and unproductive ways. How you act in public makes a huge difference in the attitude and productivity for those around us. Save the crying or ranting for private times. In public, or now on camera in the umpteenth video call, be as confident and calm as you can be. That effort gives back to everyone around you, as we all struggle to be the best leaders we can in crisis.Music Business Worldwide