Warning: No Brown M&Ms
What Van Halen can teach us about running a great finance function
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There's a legend that the rock band Van Halen used to bury a clause deep in their contracts called “the brown M&M clause”.
Basically, they put a requirement that in their green room there had to be specific set of snacks:
Potato chips with assorted dips
Nuts
Pretzels
M&Ms
12 Reese's peanut butter cups, and
12 assorted Dannon yogurts.
And the particular note on the M&Ms was interesting. In parentheses it said:
(Warning, absolutely no brown ones.)
Mind you, this is buried on like page 200 of this massive document that was the formal contract for their concert arrangement. And so when they would show up in the green room and they'd see the snack tray, if they saw brown M&Ms in the bowl, then that's when they would trash the room and throw things around and have their typical rockstar fits.
Well, this wasn't just because they were rock divas or crazy people. As I understand it, David Lee Roth was the inspiration behind this. Van Halen's concerts were incredibly complex stagecraft.
They had wild lighting and sound stages with all sorts of effects and very complex, high power, high voltage equipment that was on stage with them. And if it wasn't done just right, if everything wasn't plugged in, taped down, put into the right places, connected correctly - someone could get hurt… electrocuted…killed. And so it was very important to them that they knew everything was right.
And so they knew that if they walked into the green room and they didn't see Brown M&Ms, somebody had read every last page of that contract to make sure and say, “Oh, we better not put any brown M&Ms in there.”
And then they could go on stage confidently, do their best, and push themselves to the very edge knowing that everything had been taken care of.
So why are we talking about this in a CFO newsletter?
Michael Bayer recently shared this story with me on the podcast. He uses it with his finance team at Wasabi as an analogy to their role as finance professionals.
“I think about how we put lots of brown M&Ms into our company. We have lots of metrics that we're looking at, we have lots of controls that we put in place, lots of processes that have to run just right. And when I go to an operating manager and I say, “Look, you didn't follow this process.” It's not like I feel like I have to control everything, it's just that if I see something go through a process and the end product is I sign a contract and it has a PO number on it and it's gone through and it's got all the right signatures, et cetera, I know that everything's been taken care of. And I'm providing that service to you as an operating manager so you can go out and do your very best.”
This resonated with me. It's an inspiration for all of us to think about how we approach all those little check boxes throughout the day, all those little bits of detail that we in finance and in the business enablement functions (G&A) do to serve our companies. It's all about making sure that we've got all the proper checks and balances in the organization to make sure everything goes smoothly.
But he didn’t stop there. He hit me with one more Van Halen tale:
I would encourage anyone who's doing this, whether you're a fan of Van Halen or not, Van Halen has a great guitar solo called “Eruption”, which is challenging.
It was one of those exciting things, the solo he did in concerts. But interestingly, at about a minute and five seconds into the recording, he's doing a fancy finger technique and he misses a note.
And someone said, “Well, why didn't you fix that in editing?” Because it's a mistake. He hit the wrong key.
And he said, “That's part of the artistry. That's part of the brilliance of what I recorded. It was you know, that was me being me, and if I missed a note, so what? That's part of the performance.”
And in fact, if you listen to the remastered version of the same song, it's still in there, right at 1:05.”
So turn up the volume, have a great time, it's a great guitar solo but it's the mastery that an artist can execute on having the freedom to do whatever they want because someone made sure there's no brown M&Ms in the bowl in the green room.
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Serial CFO Michael Bayer, who is currently the CFO of Wasabi, joined me to share wisdom from his long career.
He talks about his journey from being a “CF-no" to becoming a “CF-go”
He breaks down the epochs of growth that a company goes through as it scales from driving revenue to focusing on cash flow.
He highlights the significance of order of magnitude thinking and hiring for future needs.
Michael also introduces his “rock-turning” exercise for identifying and addressing issues when joining a company
He shares his three guiding principles: speed is God, best ideas win, and if you’re not making mistakes, you’re not trying hard enough.
The episode concludes with an insightful story about Van Halen's "brown M&M" clause, and what finance leaders can learn from it.