Two famous New Orleans chefs, John Besh and Alon Shaya, were on the front page of the news last week, and not in the way they would have liked.
Their business partnership that consists of 12 restaurants and 1,200 employees, was not only going up in flames, but the very name of their co-owned Uptown restaurant, “Shaya,” was the centerpiece of a trademark lawsuit in federal court.
On top of all of that, the parent company and Besh himself are facing allegations of sexual harassment.
Was this a disaster waiting to happen, or could it have been prevented?
Many business advisors counsel people to avoid partnerships because of the “inevitable” conflict. It’s true, so many partners get “sideways” with one another that it certainly looks like conflict is inevitable. It may be. But I’ve come to believe that the biggest cause of partner conflict is a lack of thorough planning. Think about it: Who has been trained to be good partners? No one. It’s not taught in school, not even in business school.
Maybe a thorough partner planning process can’t ward off all disagreements, but it can certainly improve people’s odds of succeeding. Helping partners walk systematically through a comprehensive list of issues is the key to partner planning. Ideally, partners discuss, negotiate and agree on a broad range of issues – both interpersonal and business – when they’re getting along. That’s the key to avoiding conflict. When the process also develops plans for handling conflict when it strikes, the partners are better prepared to overcome the challenge.
Here are the issues Besh and Shaya might attended to a few years ago:
1. Address the Personal
Almost all partnerships are close personal relationships. Egos are involved. Were egos a factor in this case? It’s hard to imagine they weren’t.
The process I use to help partners plan their “deal” with one another delves into the interpersonal side of things by exploring personal styles and personal values. Many people who become disenchanted with their partners claim their partners “did not meet their expectations.” Considering that partners routinely fail to share their expectations with one another, that’s not surprising.
I encourage partners to make lists of their expectations of one another – and themselves. This helps them be explicit about their expectations, and usually leads to interesting conversations (ideally before the partners actually start operating a business together).
2. Create Clear Plans for Separation
All business partnerships will eventually separate. I’m going to say that another way, because it’s important:
You. will. separate. with. your. business. partner.
Sometimes it’s expected. Sometimes not. Sometimes it’s a conscious decision. Other times it’s forced. But I guarantee with 100% certainty (and lawyers hate guarantees) that every business partnership will end.
It’s clear that Besh and Shaya did not plan their separation and that’s part of why their divorce made the front page of The Times-Picayune. And it’s why they’re embroiled in federal trademark litigation and facing more headlines about sexual harassment.
Imagine the pain Alon Shaya feels. The restaurant, Shaya bears his family’s name and serves food that he learned to cook from his mother and grandmother. Reservations are booked a month out. The restaurant won “Best Restaurant 2016” from the James Beard Awards.
Business must be great.
He doesn’t even own it anymore.
Shaya says he wants to buy it, but without an agreement in place, Besh gets to name his price. That’s not a great place to start negotiations.
3. Discuss Ownership, Compensation, Roles and other Business Issues
Clearly, ownership of the name “Shaya” is an issue that Shaya holds close to his heart. In a trademark application he filed just as this mess was becoming public, Shaya claims he started using the name in the early 2000’s. In the federal trademark litigation that Besh filed in response, Besh claims it wasn’t in use until 2014.
Sidenote: The intellectual property attorney at my law firm, Rachel Bailey, wrote a more in-depth piece on the trademark issue.
If they had thoroughly discussed ownership, including the ownership of assets such as trademarks, they wouldn’t be arguing over the basics of their company today. Federal trademark litigation would never have become an issue. Like so many partners, they probably skipped over lots of important business basics like compensation, perks, profit distributions, and establishing an HR department…
4. Determine Responsibilities and Who Has What Authority
Most people I’ve talked to seem to think the HR issues and the ownership issues are separate. That couldn’t be further from the truth. The two are closely intertwined.
In a thorough partnership planning process, partners discuss every aspect of the business and agree on roles, decision-making authority, and what each partner is ultimately responsible for. One of those responsibilities is human resources.
Once responsibilities are established, the partners need to agree on reporting requirements to ensure everything is done according to plan. Finally, they approve consequences if things aren’t done.
Shaya has been quoted as saying that he asked Besh to set up an HR department. Clearly, they didn’t discuss that nearly enough.
If they had received the right help in planning their partnership, they would have discussed and agreed on which partner was responsible for overseeing human resources. Maybe that wouldn’t have prevented the sexual harassment, but the complaints may have been addressed and resolved in-house, not in the court of public opinion. Good HR planning often pays for itself, and easily would have in this case, according to my friend and attorney-turned-rockstar-HR-consultant, Stefanie Allweiss.
Partners Need a Process
Psychologist David Gage developed the partnership process I’ve described. He spent many years mediating partner disputes. saw what partners fought over, and designed a tool to address a wide range of business issues. Dr. Gage’s process has been used to save business partnerships that are on the brink of destruction, and to help partners who are getting along, but want to take their business (and their relationship) to the next level.
However, it’s best used before the business partnership even starts.
The 100-pound mess in Besh and Shaya’s kitchen might have been prevented with an ounce of partner-planning prevention. We’ll never know. But what’s almost certain is that people don’t recover from where Besh and Shaya have ventured. Besh has stepped down from the company that he founded. Shaya’s been kicked out. I’m not placing bets on their personal relationship.
I’m sure they never thought this could happen to them.
For all their success, they failed to plan and now they’ll spend hundreds of thousands of dollars on attorneys to resolve their dispute. They’ll also pay the enormous emotional and personal costs that come with having your name, forever searchable on the Internet, next to sexual improprieties and a partnership in flames.
But we can learn from it.
For partners, the lesson is obvious. Plan.
For those that aren’t partners, chances are you know someone who is, and your personal and business success depends on their success. It could be your spouse, your employer, a significant client, or an important vendor. In that case, it’s in your best interest to check on the health of their relationship, and whether or not they have a plan.
It’s easy to grab headlines when the partnership fails. It’s much more fun to grab headlines when the partnership succeeds.
To learn more about the process, I created a free, email-based course. Sign up on our website: http://speralaw.com/louisiana-operating-agreement