Sufficient Affluence/Sustainable Economy: Economics for small groups (part one)
By John F. Sase, Ph.D.
Gerard J. Senick, Senior Editor
Julie G. Sase, Copyeditor
“Why don’t we sing this song all together / Open our heads, let the pictures come / And if we close all our eyes together / Then we will see where we all come from”
—Mick Jagger and Keith Richards, “Sing This All Together,” Their Satanic Majesties Request (Decca/London, 1967)
During the past seven months, we have laid down some basic tracts of Economics for the recovery of Detroit. During this time, we considered the fundamental fulfillment of our needs and wants, the management of scarce resources, the division of them into human and non-human, the delineation of both into factors of production, and combined monetary and fiscal policy as carried out by the Federal Reserve Bank System and the U.S. Congress.
Last month, we explored the social benefits and costs of corporate regulation—or the lack thereof—by our Judicial Branch in alliance with Congress. We drilled down into recent episodes that highlighted the behavior and regulation of large corporate employers that form the current economic base of production.
This month, we are officially renaming our column “Sufficient Affluence/Sustainable Economy.” We are starting on a new but related series that considers this subject: If large corporations form the base of our economy, then small firms are the foundation of it. We expect that this topic will be important to many of our readers in the field of law because a sustainable economy with sufficient affluence is imperative for the practice of law, especially those firms that serve the local community exclusively. In addressing this issue, we are not changing our discussion away from the recovery of Detroit. Rather, we are amplifying the matter further. In order to facilitate the recovery of the City, Detroiters cannot expect a handout from the top down. This recovery must come from the ground up, and small businesses and professional practices are the key.
Traditionally, large businesses have started small and then have grown. The leadership ranks of large corporations have fed upon a diet of executives who grew up in small family businesses. Finally, real innovation of technology, ideas, and products more likely have emerged from the basements and garages of America than from large research facilities: Apple, Disney, Google, and Mattel represent but four of many major companies that share such humble beginnings. In addition, many Detroit law firms including Miller Canfield, Honigman Miller, and Clark Hill started small and have grown and have gained national and international reputations.
In this multi-month series, which addresses the applied economic essentials that every small business or professional practice needs, we turn to musical groups as our focal example. Many of us understand the similarity between law practices and blues, rock, and jazz bands. Also, as the proverbial fly on the wall, we may avoid potentially awkward discussions in respect to billboards, television commercials, and intra-office relationships by using musical groups rather than law firms in our arms-length examples. Any similarities between our musician examples and any attorneys—living or dead—are purely coincidental. Since the explosion of digital recording and the Internet, the music industry generally has returned to the realm of small groups. Furthermore, the economics and business realities of a string ensemble, jazz combo, or rock band are essentially the same as one another and very similar to any other small group—including law firms. Furthermore, because of the attractiveness that music and musicians hold for most of society as well as the transparency of the business operations of musical groups, this example works well for our comprehensive case study.
One, Two, Three, Four, Five
To begin, let us discuss size. As with many things in life, size does matter from an economic perspective. Though a twelve-piece ensemble and its resulting sound may open a few eyes and ears, such largesse is not optimal in the economic sense. Therefore, we turn our concentration to groups that are a bit smaller. These include entities of one to five members, a common configuration for many musical entities as well as law firms.
Some musicians, such as Bob Dylan, generally are “solopreneurs;” others, like Simon and Garfunkel, work best as duos. The group Crosby, Stills, and Nash started as a trio before adding Neil Young to the mix. Most of us remember the Beatles as a quartet, though many writers often cite musician/producer Sir George Martin as the fifth Beatle (sorry, Murray the K). The Rolling Stones steadily have been a quintet throughout the decades. However, Mick Jagger, a former student at and an Honorary Fellow of the (Fabian Socialist) London School of Economics, takes center stage in both performance and in the operation of a business that observers note is really a production company of two dozen.
We can find similar parallels in classical, jazz, and other genres of music. In jazz, the trios of Bill Evans, Oscar Peterson, and Wes Montgomery stand out, along with others. Benny Goodman, Gerry Mulligan, and the Modern Jazz Quartet are remembered among many other four-man groups. Miles Davis had a couple of quintets that included other great artists, such as Ron Carter, Wayne Shorter, and Herbie Hancock, to name but a few.
For those in our readership who prefer traditional music, we note that composers of the Classical, Baroque, Romantic, and Modern periods are often lumped together as Classical. Frequently, these composers wrote for trios, quartets, and quintets. For example, the works for trios by Johann Georg Albrechtberger, Arnold Schoenberg, and Karlheinz Stockhausen are considered outstanding examples of this form as are the quartets of Franz Joseph Haydn, Ludwig van Beethoven, and Antonin Dvorak and the quintets of Wolfgang Amadeus Mozart, Franz Peter Schubert, and Georges Bizet, in their respective forms.
Depending upon the preferences of audiences and the underlying economics, larger groups have sustained over time. Heavily subsidized orchestras, such as the New York Philharmonic and the Detroit Symphony Orchestra; large jazz ensembles that flourished during the Big-Band Era and continue to survive as “ghost bands” of greats such as Duke Ellington and Count Basie; and larger rock groups; such as Blood, Sweat, and Tears, the Fugs, and Chicago, have come and gone, have remained on the fringe of existence, or have continued to survive.
However, as with smaller law firms, groups of four or five musicians have remained the staple over time for a variety of economic and other practical reasons. Though the Big Bands flourished through the Roaring Twenties, the Great Depression, and World War II, most of the survivors began to fragment into smaller quartets and quintets during the affluent 1950s as their main audiences, which are composed of post-World War I Baby-Boomers, grew up and moved to suburban tract homes. Smaller nightclubs began to replace popular dance halls, such as the Savoy, the Palomar, and other ballrooms of the preceding decades. In order to eke out a living, most groups reduced themselves to a size that could squeeze comfortably onto equally small stages in the basement bars of Greenwich Village and other places where their denizens would gather.
The era that followed rode the wave of the post-World War II Boomers in a similar way through the Golden Age of Rock of the late 1960s and early 1970s. Along with the electric guitar, the sound de rigueur of the day was the Hammond B-3 organ. Although this instrument weighed 310 pounds, it was a reasonable load for four or five musicians to carry up three flights of stairs to play a gig at a frat house. (A personal note from the writers: though gravity was on our side, the trek downward after midnight and several kegs of beer remained a greater challenge.) Even as synthesizers and more electrified instruments emerged, groups of four or five musicians have remained fairly consistent for reasons of both musical sound and the same economics faced by quartets and quintets across the centuries.
For our exemplar group in this ongoing discussion, we will focus on the model of the quintet. We do this because the economics, business organization, and group dynamics remain clear throughout the topics that we will explore in ways that are applicable to law firms and most other service or physical-product firms. The first issue that we will explore focuses on the group dynamics and power/authority structure within the group. There can be as many types of structures and dynamics as there are kinds of human beings. However, we will consider the two extreme models between which the spectrum extends.
A Circle of Fifths—Not a Drinking Game
We can envision the first group structure as a Centralized Wheel with one authority. This person is the decision-maker at the center with the other four group members positioned outward at the ends of the wheel spokes. Similar to the face person in a law firm, the central person in a music group often starts as a “solopreneur” who selects or composes the music of the repertoire, finds the gigs, does the promotion, and performs the music on his or her own. As with any business or profession, to emerge as a sole proprietor requires an above-average combination of self-starting; risk-taking; determination; perseverance; and a bull-headed, never-give-up, never-surrender attitude. When this solopreneur decides to expand, s/he tends to search for and draw in others who will accept and follow a pre-established vision. As many observers have noted over the decades, the Rolling Stones would be a better-than-average blues band without Mick Jagger. However, it took the vision, presence, and charisma of Jagger to carry the Stones to their pinnacle in the duopoly of British Rock, which they share with the Beatles. (Some musical purists would add that the guitar skills and rock ‘n’ roll authenticity of Keith Richards is just as important to the success of the Stones.)
The structural form of a wheel focuses decision-making on one central and multi-faceted individual (e.g. Mick Jagger can sing, dance, and play harmonica and rhythm guitar. However, Jagger’s disciplined background as a military brat and a student of Economics equipped him with other useful skills and knowledge). The Centralized-Wheel structure provides superiority of speed and efficiency in decision-making and other managerial functions. Though a focus on one superior talent may limit the group in respect to complex problem-solving, this structure, developed around a Type A personality, tends to be more accurate for solving simple problems rapidly. As in many bands as well as law firms, we observe this model in many small businesses.
Traditionally, this centralized model has been characterized as a group with one master surrounded by very competent journeymen and apprentices. For example, the eighteenth-century Scottish economist Adam Smith considered a large company to be one with twenty-five persons: one master, a handful of journeymen, and the rest as apprentices. A current example of Smith’s observation might be the Rolling Stones, with
Mick Jagger as His Satanic Majesty.
As with most great artists in the fields of painting, sculpture, and writing, music masters have not done all of the work by themselves. However, their names live on because they took the risks, got the commissions, and signed (off on) the finished work. This analogy carries over into law firms and most other forms of traditional professions, businesses, and trades.
The second model of group structure and behavior that we will consider is the Decentralized All-Channel model. In its pure form, all five members have legal rights, economic responsibilities, shared risk, and decision-making authority as equal partners. In this regard, be they attorneys or musicians, they constitute a band of solopreneurs. Under the laws of general partnership, members are treated as such unless formal exceptions are stated in writing. There exists strength and balance in the number of members, each of whom bring their individual talents to the table. However, there exists an inherent weakness within this configuration. If one or more of these partners leave, are fired, or pass away, the structure ceases to exist. These individuals may be replaced by comparable parties. However, the partnership then becomes an entirely new entity—different musicians, a different sound.
The communication, power, and decision-making flows among all five members, both separately and collectively. In contrast to the model of the Centralized Wheel, in which these three elements flow from one center outward along four separate spokes to the secondary members, the flows within the Decentralized All-Channel model are more richly complex. The flows move back and forth in parity between any two members of the circle. Within a circle of five members, there exist nine interactive channels between members. Each of these nine channels flows separately between any two members of the group. In sets of three, the channels flow between any three members, in sets of six as two-way channels between any subgroup of four, and as a full set of nine among all five members simultaneously.
When such a group functions in relative equilibrium, a greater satisfaction occurs within the group experience. As a result, the group exists more cohesively than otherwise. Furthermore, because of the depth and scope of knowledge, skills, and talents brought together in parity, the interflow of communication, power, and decision-making lends greater accuracy to solving complex problems.
In the field of music, the Beatles probably functioned as a Decentralized All-Channel group, at least to some degree. George Martin possessed much greater musical and industry knowledge than the four lads from Liverpool. However, as a skilled professional arranger/producer/engineer, he exerted whatever power and control that he brought in a non-obtrusive, detached manner that did not dominate the creative process.
Martin just added his touch and helped to shape the sound. On the other hand, when Yoko Ono made her presence known within the group, all hell broke loose as the equilibrium of group dynamics tipped abruptly.
Group Dynamics, Rhythm, Pitch, and Harmony
The process of problem-solving and decision-making has been studied extensively for more than a century. This body of work remains particularly applicable to the Decentralized All-Channel group. Once we work within and understand the dynamics of a small group, we can explore challenges, make decisions, and implement the solutions more effectively. In this section, we will explore ideas that were put forth and popularized by the American philosopher, educational reformer, and functional psychologist John Dewey; the American professor of Communication B. Aubrey Fisher; and many others during the twentieth century.
When a group in which the members already know one another comes together to deal with a problem or challenge, it is important for it to renew communication, express attitudes with equanimity, and reduce tensions that have developed since a previous meeting. Depending upon the general chemistry of the group and the frequency of meetings, this time of retrieval may vary. However, the objective is to regain a climate in which clear interpretation and agreement can occur as the group members open up with one another and peacefully form and express opinions. Once the atmosphere has calmed and stabilized, the group can move forward to identify the problem or challenge and to discuss it with the stated objective of discovering the reason for its existence.
Next, the group begins to analyze aspects of the problem/challenge as observed and felt from the given perspective of dynamics, rhythm, pitch, and degree of harmony that exists within the group. During this phase of group interaction, each member addresses the issues from his/her individual perspective as the group collectively allows an increasing and balanced participation within the mix. Without this level of consciousness, the group session can collapse into a useless, bland unison of agreement or into the domination by one or two of the members. The objective at this stage of the process is to reach a general level of consonance without entirely eliminating a healthy element of dissonance.
This element of dissonance remains essential in the emergence of the spread and balance necessary to reach a workable group consensus. Furthermore, criteria can be introduced or may emerge organically to identify the goals of the final decision.
Analogously to the process of editing and developing a final mix of a recorded musical performance, this emergent phase in the group process may take the longest length of time to develop. With a final goal laid out on the table, the group may take the resulting freedom to voice, test, and discuss many possible solutions and sub-solutions. Through this process of trial and error, the group can find and select one or many solutions as the criteria for achieving its final goal.
During this phase of the work session, the task and its arrangement becomes noticeable to the group as it works to find form within the substance of its process. Furthermore, though uncertainty may increase during the criteria-selection process, member responses quiet in favor of a compromise solution; after all, time is money. Through this process of give and take toward an emergent harmony, the group will tend to reach toward a level of unanimity that transcends the factionality existent in the earlier conflictive stage.
This lengthy period of time, in which one or a set of solutions are adapted and implemented as the final criteria, tends to dissolve into the final phase of mutual reinforcement. Throughout this phase, members seek to review their final decisions through the range of their own viewpoints. More commonly today, a quintet in any field may take its final work to a Mastermind Group or other support system in order to elicit feedback, comments, and more objective input. These finalizing actions help the group to develop greater solidarity within, as further approval and accord reinforce the final decision.
“It’s Butter, Baby!”
This month, we have explored the dynamics of group size. We considered how communication, authority, and decision-making can be affected in terms of the economic maxim that time is money—a maxim most relevant in both music and law. Next month, we will explore the major functional areas that all small groups must organize and manage in order to remain viable economically. Therefore, we will delineate the responsibilities of a small group into those of Production, Transportation, Properties, Marketing, and Management and generally discuss the sub-functions in each area. As we will see, all of these areas are relevant to both music groups and law firms, especially when the members “play a gig” out of town. This delineation of tasks will form our outline for the ongoing discussion over successive months.
Though half of the trial attorneys whom we know have been musicians at some stage of their lives, the greater take-away of this series may be the edification of those in the field of law who have their own small practices, who are thinking of starting a small practice, or who have clients operating their own small professional practice or business. To all of our audience, we say “Rock on!”
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A PDF copy of this article will be posted at http://www.saseassociates.com/legalnewscolumn.html. We continue to post videos related to our monthly column on www.YouTube.com/SaseAssociates in the Legal News Features playlist.
KindleBooks (that can be read on PCs and Macs) and paperbacks adapted from selected past series are available through amazon.com – Search All – John Sase
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Dr. John F. Sase has taught Economics for more than three decades and has practiced Forensic and Investigative Economics since the early 1990s. He earned an M.A. in Economics and an MBA at the University of Detroit and a Ph.D. in Economics at Wayne State University. He is a graduate of the University of Detroit Jesuit High School. Dr. Sase can be reached at 248-569-5228 and at drjohn@saseassociates.com. Find his educational videos of interest to attorneys at www.youtube.com/saseassociates.
Gerard J. Senick is a freelance writer, editor, and musician. He earned his degree in English at the University of Detroit and was a supervisory editor at Gale Research Company (now Cengage) for over twenty years. Currently, he edits books for publication and gives seminars on writing and music. Senick can be reached at 313-342-4048 and at www.senick-editing.com. You can find some of his writing tips at www.YouTube.com/SenickEditing.
Julie G. Sase is a freelance copyeditor and proofreader. She earned her degree in English at Marygrove College and her graduate certificate in Parent Coaching from Seattle Pacific University. As a consultant, Ms. Sase coaches clients, writes articles for publication, and gives interviews to various media. She can be reached at Julie@royaloakparentcoaching.com.
