5 Leadership Lessons We Can Learn From Pandora

Pandora, the music streaming and automated music recommendation service, has recently become the world’s most popular internet radio station.

To say I’m a raving fan is an understatement. It has literally opened my eyes, (ahem, ears), to a whole new world of phenomenal music experiences. Every time I open the Pandora app on my phone I’m like a kid waiting in line for Mr Whippy, excitedly anticipating the discovery of whatever new aural treats it has lined up for me. It’s rare that I don’t find something that matches my taste in music exactly, like it was hand picked just for me.

So what’s Pandora got to do with leadership? Lessons are to be learned everywhere, even from an irreverent music platform.

From a business perspective, I’ve watched this company with an eye of intrigue.

Here are 5 leadership lessons we can learn from Pandora:-

1. Start with a simple idea. How uncomplicated is the concept of creating a personalised music station based on your customer’s unique tastes? With over 250 million fans in Australia, New Zealand and the USA, it’s pretty obvious this simple idea is a good one. Sure, it might be more complicated to bring that simple idea to fruition, but that’s where innovation and collaboration can be your friends. Tip? Start with the question, “what if…..?”

2. Create bespoke products/services, uniquely for your customer. Today’s (and tomorrow’s) world is about listening intently to your customer and then customising your solutions. Key word? Listen. Borne from the genome project, the idea for Pandora was to create a separate, individualised radio station for each user – having only the music every individual likes. If that’s not customer focused, I don’t know what is.

Tim Westergren, who founded Pandora in 2000 and now serves as its Chief Strategy Officer, sums it up nicely in this quote:

“We want Pandora to feel like it’s talking to you. We also literally talk to people. We have a team of people who are called listener advocates. Their job is just to respond personally to every single email, phone call, or letter we get. The identity of Pandora is forged through those collective interactions.”

3. Stay the course. Got a bloody good idea? It’s easy to be swayed from our vision, especially when the honeymoon period is over and we encounter obstacles. Learn vicariously from Pandora’s story. Initially the company pursued a transitional strategy of technology licensing to third parties including AOL, Best Buy, Barnes & Noble, and Tower Records. The company struggled to reach profitability under this model and nearly failed. In 2004, the company returned to its initial vision of producing customised radio stations and changed its name to Pandora Media. The rest, as they say, is history.

4. Don’t get spooked by short-term, less than stellar results. Expect you’ll have good years and bad. Just like in life, expect that you’ll have pain and joy – it’s just part of the ride. Faced with short term failures or setbacks? Weather the storm and focus predominantly on the longer term horizon. On the surface, Pandora’s stock plunged 33% in 2014. But all the indicators for growth (both bottom and top line) are encouraging to say the least. Pandora is bigger now than it was a year ago. And it’s getting smarter at monetising its traffic. See here for more on this.

Many of the CEOs and senior executives I work with feel pressured to ‘deliver’ every year (and even every quarter) to the extent that in some environments, one missed profit target means you better start sharpening up your cv.  Sure, you have to survive to thrive and be around to reap the rewards (and the awards), but balance short and long-term performance. Don’t let one stakeholder (i.e. shareholders or the market) steal your leadership mojo and put you off your game.

5. Finally, Pandora listens, collaborates and co-creates with its customers. It’s a participative process, this Pandora experience. From the thumbs up/thumbs down button for each song, to the “are you still listening?” pop up if you stop interacting after a few songs. In terms of collaboration, Pandora harnesses the brilliance and ideas of others, especially their customers, to bring their great idea to fruition. Where can you take a leaf out of their book? Note: Crowdsourcing is just one collaborative process that’s open to leaders, if you want to channel this vibe.

If you’re a fan of Pandora too, I’d love to hear your thoughts on why it’s the bomb and if you have another organisation you think is doing cool stuff and who we can learn from as leaders, tell us!

1 Comment

  1. Emma Dean on February 5, 2015 at 4:48 pm

    Love it Suzi! I had never heard of it before! xoxo

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Suzi McAlpine

Suzi McAlpine is a Leadership Development Specialist and author of the award-winning leadership blog, The Leader’s Digest. She writes and teaches about accomplished leadership, what magic emerges when it’s present, and how to ignite better leadership in individuals, teams and organisations. Suzi has been a leader and senior executive herself, working alongside CEOs and executive teams in a variety of roles. Her experience has included being a head-hunter, an executive coach, and a practice leader for a division at the world’s largest HR consulting firm. Suzi provides a range of services as a Leadership Development Specialist, including executive coaching, leadership workshops and development programmes for CEOs, leadership teams and organisations throughout New Zealand.

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