“It’s not personal, it’s just business.”
This often used phrase is utilized in a variety of contexts, often to justify some extreme unsupported negotiation position or rationalize an unreasonable result. However, it is plain wrong; business is personal. Business owners who fail to recognize this limit their success and risk losing their investment, goodwill or business altogether. Alternatively, the business owner who recognizes the personal nature of business will grow their business and when faced with adversity, will respond in a non-emotional, strategic manner that can turn the conflict into an opportunity.
Business owners choose who they want to work with and build trust over years of working together. They deal with a variety of constituents, including customers, vendors, suppliers, and employees. Building each one of these relationships takes time, energy and effort. Over years of working with these parties, business owners and their constituents build trust and confidence in each other. On the other hand, business owners can lose trust in a relationship or have a falling out. Even the relationship between long term partners can deteriorate. It is in these critical times that business owners understand that while business is personal, their best response must be unemotional and strategic.
While the cause of the dispute may be personal, a business owner’s response need not, and should not, be. Often times a successful resolution of the matter is determined by the actions of the parties and the party with the non-emotional strategic response prevails.
Taylor Swift’s Strategic Response
Let’s take the young singer above, Taylor Swift, as an example. Widely successful, her original six album recordings were worth a mint. Yes, were. Big Machine Label Group, the owner of the rights, was sold to her mortal enemy Scooter Braun’s Ithaca Holdings, LLC (think Kanye West, Justin Bieber) in 2019, who then re-sold the rights to Shamrock Holdings (the Disney family’s private equity firm). After Taylor Swift unsuccessfully tried to purchase the rights, she was upset. It is not just business, it is personal for her, as evidenced by her quote at the time: “This just happened to me without my approval, consultation or consent. [the buyer failed to] ask how I might feel about the new owner of my art, the music I wrote, the videos I created, photos of me, my handwriting, my album designs.” For more details see: Swift Recordings.
However, instead of lashing out, filing a lawsuit doomed to fail or illegally limiting the value of the rights, she clearly went to her legal advisors and poised the question “what can I do?” The result? She declared that she is going to re-record the songs and use her influence to promote the new recordings, rather than the originals. The first album to be re-recorded, “Fearless,” was released April 9, 2021.
This is a strategic response. In addition to capitalizing on the new songs, she could potentially render the investment into the recordings worthless. This is a very strategic response based on personal feelings. Did the buyers fail to recognize that business is personal? It remains to be seen what impact the new recordings will have on their investment.
Emotional Responses Fail
It is important to note that successful business owners do not rely on knee-jerk emotional responses. Emotional responses are the ones that often create the liability or fail to contain it. The artist who attempts to satisfy family and friends, but does not evaluate his or her options before signing their rights away. The excited business owner who signs an overly lucrative agreement without an exit strategy. The employee who in their haste to begin a new job signs an unreasonably broad non-compete. All of these situations wound up in poor results for the clients and were preventable if they sought out advice before responding.
Strategic Responses Prevail
Alternatives exist, but they need to be discussed, evaluated and implemented. Those clients who do so in advance usually come out ahead. The most successful outcomes are the result of clients evaluating their alternatives and laying the foundational basis before the dispute arises. For example, here a few matters which which we have participated in:
• the employee who is not compensated relative to his or her worth, so leaves without taking any of the employer’s goodwill or resources and creates a new widely successful company.
• the reverse, where the employee starts a competing business, the former employer uses its competitive strength to crush the new enterprise and continues to grow thereafter.
• The business owners who seek out advice and take action to protect themselves before entering into discussions to dissolve the business or buy-out long-time partners.
• The owner who negotiates language into transaction documents to address foreseeable events, and capitalizes when the events occur.
The impetus for each of the initial actions above were very personal. It wasn’t just business. Care must be taken to nurture relationships, establish trust and seek mutually beneficial resolutions to outstanding issues while avoiding emotional responses. Those who successfully implement strategic non-emotional responses will succeed in the long run.
In a quandary with a sensitive situation? Call us to evaluate and create a strategic response and lay the groundwork for its implementation to achieve your objectives. While we don’t quite know whether Taylor Swift’s strategy will be successful, we do know that it isn’t just business, it’s personal.