Sunday, May 24, 2020

Tower Records: Another Example of How the Mighty Fall

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It was one of the greatest tragedies of my life, to be honest with you, when it closed down. It really, really upset me. I miss it. I miss that routine, you know, of going to buy my records or my CDs, whatever.--Elton John

This month I've been reading How the Mighty Fall by Jim Collins. The book is a powerful analysis of how successful companies decline and fail.

I'd read two of Jim Collins' other books and found them both useful and personally rewarding. Built to Last illustrates the difference between founders seeking to create a legacy vs. entrepreneurs simply seeking to make a quick buck. Built to Last is a stark contrast to creative thinkers whose aim is simply to build companies they can flip into a big personal gain.

Good to Great's subtitle is pointed: "Why Some Companies Make the Leap and Others Don't." How do mediocre companies become superior and dominant in their industries? I couldn't help but think of  the New England Patriots as a team that transcended the ordinary when they hired Bill Belicheck. Exceptional leadership is definitely one of the features of great companies, Collins notes. A second feature, Collins notes, is "a culture of discipline."

The documentary All Things Must Pass is the story of Tower Records, its ascendancy and eventual decline. At its height this was a billion dollar record company with branches in 30 countries. A few short years later it was defunct. By watching this documentary you will vividly see the five steps process outlined in Jim Collins' How the Mighty Fall. These steps are as follows.

1. Hubris Born of Success
2. Undisciplined Pursuit of More
3. Denial of Risk and Peril
4. Grasping for Salvation
5. Capitulation to Irrelevance or Death

It's almost startling how the history of Tower Records, as outlined in this documentary, so perfectly follows Jim Collins' outline.

Established in 1960, Tower Records became a retail powerhouse with two hundred stores, in 30 countries, on five continents. Its humble beginnings in a small town drugstore happened to take place at precisely the right time. As they say, timing is everything. In 1999, Tower Records made $1 billion. In 2006, the company filed for bankruptcy.

* * * *

"It wasn't a job. It was just a way of life."

The documentary puts a positive spin on the story, but the realities of how it went down are pretty apparent. It was a party, and eventually there were people who got hurt. But while the party was going on, no one seemed to mind, I suppose. There was enough drugs, sex and rock 'n roll to satisfy those involved.

* * * *

At the core of Tower Records was this motto, which captured the essence of a generation: No Music, No Life. The emergence of radio at that time was also a phenomenon. The music was on the airwaves everywhere. AM superstations like WABC out of New York and others from the Deep South helped whet the appetite, marketing the new sounds. In the 60s FM radio bumped it to a new level.

In the early 80s Michael Jackson's Thriller and MTV gave the record industry another adrenaline rush. At the core, though, it was the same theme: No Music, No Life.

* * * *

The title of this documentary was borrowed from George Harrison's triple album released after the Beatles broke. In my own personal career I've often used this expression, All Things Must Pass. When things are going well, cherish it, because "this too shall pass."

The meteoric rise of Tower Records must have been a heady experience. Those who were there in the beginning talk about those days the way some might talk about a memorable event like Woodstock, except that this event lasted four decades. The astute viewer will observe that the seeds of their success were also their undoing. Things change, and the culture they created didn't.

Tower Records was not a victim. Many great companies do succeed in making difficult transitions.

* * * *

Today is Bob Dylan's 79th Birthday. He himself made many transitions during his career. With the advent of his Never Ending Tour in the late 1980's he began doing nearly 100 shows a year. COVID-19 succeeded in disrupting his schedule but hasn't interfered with his continuing to be relevant. His newest album of original material is due to be released in mid-June.

As I am oft fond of saying, there's a Dylan lyric or song for every situation. If you've read this for the marketing message sub-text woven into this blog post, then the Dylan line you'll want as your takeaway is, "He not busy being born is busy dying."

Life is about re-invention. Times change. Are you being renewed?

Related Links
Duluth Dylan Fest culminates today with three live streaming events at noon, 5 and 7:30 CST. Here is the Facebook Link to links for these three events.
Trivia: How many cover versions of Bob Dylan songs were recorded by other artists and sold via Tower Records from 1961-2006? 


David Beard said...

Do you think Tower could have survived the death, really, of recorded music that killed so many record stores?

Ed Newman said...

I think that had they wanted to, they might have been able to find a way. I base this notion on Andy Grove's Only the Paranoid Survive.
I think that they were accustomed to gathering low hanging fruit and were not prepared for the shifts that lay ahead.
They weren't just another record store. They were a billion dollar business that reaped profits from a certain style of distribution setup. They had assets that many smaller fish did not have. They made assumptions that could have been re-aligned with the future....
My thoughts...

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