Money – that’s all I want. By Alan Measures, Moog

Last month The Guardian ran a piece on what jazz band leaders could teach us about leadership. It prompted me to wonder what reward managers could learn from musicians.

I already had one example stuck fast in my mind. It may be true that money doesn’t motivate, maybe it can’t buy you love, but there’s no doubt that James Hetfield (in a scene captured in the “Some Kind of Monster” documentary from 2005) makes Rob Trujillo’s day when he tells Rob that he’s Metallica new bass player, and there’s a $1millon advance on appointment. Of course the reward person in me couldn’t help but wonder how things panned out after that. Estimated earnings for the band fall anywhere between $20m to $40m per year, so maybe Rob’s “golden hello” may not have been as astounding as it first seemed.

Balancing creativity, collaboration and reward is a dilemma for artists and businesses alike. A studio recording or live performance is very much a team effort – performing without a bass player or drummer isn’t an option. To that end Coldplay have adopted perhaps the purist model of team based pay that can be found, as they split the song writing royalties evenly, despite the fact that front man Chris Martin writes all the songs. Metallica and U2 operate a slight but financially significant variant of the same model, which sees the royalties split evenly into two pots – one for music and one for lyrics. The music is split evenly between the four band members, as it’s their interaction together as musicians that creates the music of each song. The other pot goes to the lyric writer.

Whilst the adulation and egos of the music business may be some way from what we experience in our day to day jobs (well, there’s not much adulation that’s for sure…) if music can teach us anything, it’s that Adams’ equity theory is alive and well, and heeded by the wise. Part of Adams’ theory was that people who perceive themselves as under-rewarded will be unhappy and likely to deal with this either by seeking greater reward / recognition, or ending the arrangement. Even if that means breaking up some of the most profitable, productive teams ever known.

Adams published his theory in 1965, the same year as The Beatles released “Yesterday”, thought to be the most frequently performed and recorded (and therefore highest earning) song of all time. Lennon and McCartney shared all writing income irrespective of whether they wrote together or alone. So although Paul McCartney was the only Beatle involved in the writing and recording of “Yesterday”, it was hugely valuable to John Lennon too. This sharing arrangement is often cited as one of the factors that made Lennon and McCartney so successful – it didn’t matter whose songs were recorded, or how much each contributed to any song, financial outcome was the same. And yet  money was one of the factors that drove The Beatles apart; George Harrison sat outside this sharing arrangement frustrated that his song writing skills were largely unrecognized, his songs often unrecorded, and saw no reason to fight the break up of the band .

Whether you are a band or a business, making sure the reward system helps rather than hinders the value creation process is critical. Whilst companies may not need to create the kind of financial penalty free creative environments that some musicians need in order to thrive, it’s clear that businesses or bands alike ignore Adams theory at their peril.