Lessons from the Grateful Dead on Replacing Workers with Technology

If managers don't know when technology should replace people, they can destroy the product they're trying to create.
October 2014
Trade ad for Grateful Dead's 1970 album American Beauty. Wikimedia Commons
By Mark Funkhouser  |  Former Publisher
Former publisher of Governing and former mayor of Kansas City

In the foreword to David Dodd’s The Complete Annotated Grateful Dead Lyrics, Robert Hunter, the band’s “lyricist in residence,” wrote that the song “Uncle John’s Band” represented “the first lyric I wrote with the aid of that newfangled gadget, the cassette tape recorder. I taped the band playing the arrangement and was able to score lyrics at leisure rather than scratch away hurriedly at rehearsals, waiting for particular sections to come around again.”

What Hunter was describing, of course, was an improvement in productivity resulting from the application of new technology. Productivity is usually measured in terms of the labor cost per unit of production, and in most cases improvement is achieved by using new technology to reduce head count. For instance, a steel mill that once employed 10,000 workers produces the same tonnage with only a thousand employees, bank tellers are replaced by ATMs and elevator operators become a thing of the past. But in Hunter’s application of new technology, no one’s position was eliminated. It’s an example of what has been called “the quartet effect” at work.

When you reduce the head count of a musical quartet, you have not improved its productivity. If what you wanted was the music of a quartet, you have destroyed the product. The technology Hunter employed is the kind that, rather than eliminating jobs, allows existing staff to make better use of their time and gives them the opportunity to create higher-quality products.

How is this relevant to government? For most local governments, public safety constitutes the largest single category of expenditures, typically accounting for about 60 percent of total costs. For states and for some local governments, education is the dominant cost category. But it’s important to remember that within these areas, personnel costs -- the salaries and benefits of police officers, firefighters and school teachers -- are the real cost drivers. Personnel costs typically represent 80 percent or more of the total cost of a police department, for example. Few would argue that taking cops off the streets or teachers out of classrooms improves productivity.

In general, it’s true that the best way for governments to control costs is to use collaboration and technology to reduce employee head count. Governments that deliver good value for taxpayer money will have fewer employees, and those workers will be better paid, better trained, better equipped and better managed. But an important part of good management is figuring out when the quartet effect applies -- knowing not only which types of positions should be eliminated but also when to use technology to improve the use of time by those employees whose positions ought not to be eliminated.

“Uncle John’s Band” was first performed on Dec. 4, 1969, near the beginning of a 30-year run for a band that had an indelible effect on American music. A state, city or county administration that wants to achieve a similar record of impact and sustainability should be quick to adopt labor-saving technology. But it also should be careful to discern when the quartet effect applies and the elimination of positions would destroy the very product it is trying to create.