Brown M&Ms Story

David Lee Roth, lead singer of the rock group Van Halen, made what seemed to be a ridiculous demand from concert organizers: All brown M&Ms were to be removed from food served backstage and in the band’s dressing room. Van Halen was popular, and thus he could get away with making this sort of demand.

Though the demand may seem ridiculous, it was a brilliantly calculated business decision. According to Roth, Van Halen’s concerts were one of the most complex shows performed at the time. The show setup was very complicated, requiring a lot of equipment and elaborate electrical installations. The group found that the concert organizers often failed to read the contract Van Halen signed with them. This was not your typical two-page contract. Van Halen’s contract was the size of a phone book – it was a technical, very detailed manual for how to set up the show. Organizers’ failure to abide by it presented a safety risk and caused delays and cost overruns.

What was an easy way to find out if organizers actually read the contract? In the middle of the contract, in between some very technical details, Van Halen inserted “There will be no brown M&Ms in the backstage area and dressing room, or the promoter will forfeit their fee for the show.” When Roth showed up at a venue, he’d go directly backstage and to the dressing rooms and look for brown M&Ms. If he saw any, well, too bad, the promoter had not read the contract. And then every single part of the stage setup had to be reexamined.

I love this brown M&Ms story. It shows that when you deal with something very complex and nebulous, look for little clues that may give you hints about totality. How does this relate to hiring? During the interview process and even after I hire a person, I pay close attention to little cues. I pay attention how the person talks to spam callers. How do they treat a waiter at a restaurant when he screws up their order (especially after I have asked the waiter to do so ahead of time)? If they are rude to the waiter, it is in their nature to be rude to others. I don’t want these people in IMA.

One of the folks I had to let go was constantly late to work. Out of twenty days of employment she was on time two or three times and continued to be late after it was pointed out to her that being on time was important. Her tardiness was a brown M&M moment for me. She was still getting trained for a job where mistakes could result in significant financial and reputational damage. Since she was still learning, it was difficult for us to evaluate how well she’d do on the job, since she produced little output. Her being constantly late was not the reason I had to let her go, but it gave me insight into her character, put me on higher alert, and made me notice other issues I had missed during our flawed interviewing process.

One last thing on being late. I read that Charlie Munger is always fifteen minutes early to his meetings. Vladimir Putin, on the other hand, intentionally makes world leaders that he considers below him wait for hours. Being on time shows respect for others. I am rarely late to meetings. I always try to be 5 minutes early (I am yet to reach Charlie Munger’s 15 minutes early level). If I am ever late, I apologize profusely. Being late suggests that I may think I’m more important than the person who is waiting for me. Not a message I ever want to communicate to anyone, no matter what their social status is.