Reliability Breeds Trust
Reliability breeds trust and trust is a driver for business. Be trustworthy. Trust makes a lot of things easier in business.
Do good, and if you can’t, won’t, or are unable to, don’t do bad.
— Manny Stul #BillionDollarGoldNuggets
Cai Dongqing identified reliability as the main reason for the success of his company.
I think it was reliability and charm that helped us win much support and enduring cooperation from our partners. In the commercial world, many decisions and transactions are not just about business. It encompasses a lot of good faith or intangible things, such as reliability, integrity, sincerity, and the personality.
If you are not trusted, you can’t even open a bank account, so prove you are trustworthy.
For Mohed Altrad, banks were a great challenge at the beginning of his career in the scaffolding industry. He obtained a PhD in France, he had a great job in Abu Dhabi that earned him a lot of money, and then he doubled his money by founding and selling a computer company. But for the French banks he still wasn’t trustworthy enough.
Banks didn’t trust me. They were saying, “This is a Bedouin guy, Syrian, Arab, coming from computers and buying bankrupted companies.” Really, I had the greatest problem to open a bank account when I took over Mefran. I wasn’t asking for money, just a bank account. You can’t work without it.
And then I succeeded in opening an account, because they took my house as collateral. And the first year there was some small profit, and the bank didn’t believe it. They scrutinized the balance sheet many times to understand what’s wrong. [chuckles] It’s not possible. That was a great obstacle, really.
How to build your reliability?
Start with simple things: Be on time.
Such a simple thing as punctuality is among the basic success tools named by many billionaires.
Cho Tak Wong stresses to “always be on time, and if you promise somebody, always be there.”
Keep your word. Your word is your honor.
Frank Stronach describes his approach as follows: “If you say something, you must keep it. Number one is do what you say.”
It is easy to respect a contract favorable to you. But it is important to respect your contracts even and especially when they turn out to be a bad deal.
If you say something, you must keep it. Number one is do what you say.
— Frank Stronach #BillionDollarGoldNuggets
Don’t make empty statements. Be credible.
Naveen Jain is known in the industry for making one-time offers and never renegotiating on them.
The rule in life is never say something that you’re not willing to follow. If you say, “The price is 50 million,” you can’t then ask, “Would you take 40?” If you have broken the rule once, then the word in the industry goes out that you will make a counteroffer. It’s about your credibility.
And always remember that it takes generations to build credibility and it only takes one action to kill it.
My conversation with Naveen about trust was an eye-opener.
Let me give you just one more thought about how business gets done in life. Most people tell you it’s all about who you know. And that is just so wrong, I think it is the people who have never really been successful in life [who say this]. It is never about who you know. It’s not even about who likes you. There are three levels before a deep, long-term, sustainable business relationship is formed. They have to know you, they have to like you, but most importantly they have to trust you. So it’s not about who you know, it’s not about who likes you, it’s about who trusts you. And if you can’t develop that third level, you can have short-term deals with people, but you can never have a long-term business relationship.
Let’s quote this golden rule of integrity: Trust is a greater compliment than affection.
It’s not about who you know, it’s not about who likes you, it’s about who trusts you.
— Naveen Jain #BillionDollarGoldNuggets
Treat People with Integrity
Wish people well and be kind to them.
I asked Narayana Murthy what was success for him.
Success is about lighting up the eyes and bringing a smile to the face of people when you enter a room. You do not have to be rich, famous, beautiful, or powerful to bring a smile to the faces of people. They smile because they know that you are a decent person, you care for them, and that you wish them well.
Trust is a greater compliment than affection.
— Rafael Badziag @BillionairePal #BillionDollarGoldNuggets
Be Fair
Be straight and fair in your dealings with other people. Being fair has to do with ethics, but also it’s beneficial in business. Fairly treated employees are more motivated, fairly treated business partners more loyal. But it also has an economic dimension. An unfair deal is a short-lived deal. So strive for WIN-WIN situations.
Success is about lighting up the eyes and bringing a smile to the face of people when you enter a room.
— Narayana Murthy #BillionDollarGoldNuggets
Tony Tan Caktiong thinks from the perspective of the other party to understand their needs.
My belief is always a shared reward; it cannot be one-sided. It’s nice to let people think that they get more out of it instead of you getting more out of it. In any deal or in any problem, it is always a question of how do I make that person better. Can he get a better deal? Can he get a better future? And I think that works always, up to the point where people in my company will say in any negotiation, “Don’t let Tony join, ’cause he will give away everything.” But that’s my belief. Once you let the other party feel that he also gets a lot, the deal becomes smoother.
This fairness is deeply rooted in Tony’s life philosophy.
For Petter Stordalen, “A good deal is when both parties feel like they have come out on top.”
Don’t Wrong Other People
Billionaires follow the Golden Rule: Do unto others what you want others to do unto you. This is also Tony Tan Caktiong’s life motto and the most valuable piece of wisdom for Jack Cowin.
Do not hurt people. I asked Cho Tak Wong what he avoided in business.
Anything which would hurt the customer’s interest. Anything hurting other people I will not do.
A good deal is when both parties feel like they have come out on top.
— Petter Stordalen #BillionDollarGoldNuggets
Respect People
Billionaires treat people with respect.
Petter Stordalen explained to me why:
My father said that people will look at you. If you treat people good, they will be loyal and they will be good to you. And treat everybody equal. Every guest is important to me in the hotel. Doesn’t matter if you come in jeans or in a new suit. Everybody’s important.
You should treat a waitress as well as your business partner, says Naveen Jain.
Allowing people to treat other people who serve them with disrespect makes me cry. I have seen people who are extremely kind to you when you are doing business with them because they need something from you, and then they are mean to the waitress. And to me, that’s the number one rule, I never do business with them because if they treat people like that, I know someday they’re going to treat me like that.
You should not only respect people, but also recognize them when they do something good for you.
Trust People
Chip Wilson, like most billionaires I interviewed, is trustful of people. When we met in his house in Vancouver, Canada, he explained his approach.
I think in essence, my genius in life is I trust people implicitly, and my downfall in life is I trust people implicitly. Because I’m a trusting person, the legal system doesn’t hold a lot of love for me. But there’s this line that I have here. “I wish people were the dream I want them to be, but that’s not how they show up. My love of possibility in people wants me to believe.”
I’ve come to l
earn that I love to leave my car unlocked, and if people want to steal from it, fine. In business, I’ve had many people steal from me when I’ve left my car open, my business open. But I wouldn’t want to change myself. I have an inherent love for people; I think it attracts really good people, but it also attracts sociopaths.
Yes, you will run into people who don’t deserve trust. Frank Stronach explains why you should be trustful despite it.
Sometimes people say to me I’m too trusting. But look, I’ve done very well; sometimes I think you go further to trust people, and occasionally you run into people that are not trustworthy, or that maybe don’t have the greatest character. But it’s worth the risk.
Be Loyal
Loyalty is important in business for both sides.
Petter Stordalen explained to me why:
Be loyal. You meet a lot of people; be nice to everybody. Because there will always be times when you need help. If you have been treating people very good, they will help you, even if it’s very tough times. Be nice to everybody on your way up. Doesn’t matter if they work in cleaning, doesn’t matter if they are out there washing dishes. Because you might need them when you are on your way down. And most people forget where they are coming from and forget the people who helped them.
Petter speaks out of experience. After the wondrous turnaround of Steen & Strøm that I wrote about in chapter 15, Petter started to buy shopping centers.
I started with the ambition to build the biggest shopping center company in Scandinavia, and we did. From 1992 to 1996, we had huge expansion. In 1996, we listed the company, earned tons of money, had a lot of cash in the bank; I was feeling this is my time, this is my company. Even though I owned a small portion, 3%, 4%, it was my idea. I had done the job, I was the CEO. All the guys were handpicked by me. We had the best people. We were the fastest-growing company.
At the peak of my shopping center career, I got fired.
Petter got into a conflict with a major shareholder who simultaneously was a tenant and wanted to see the rental contracts of his competitors. It was against business ethics. Petter didn’t want to cave in and got fired.
Some people will agree that Mike Tyson hasn’t said very many smart things, but he said this one smart thing, “Everybody has a plan until they get knocked out.” I was knocked out. I was unprepared. I was humiliated. There was only one thing in my mind: revenge. “I will be back faster than last time. I will build a new company.”
That’s when Petter gave the famous press conference announcing he would now build the largest hotel chain in Scandinavia, which you read about in chapter 11. Fortunately, Petter made many friends on the way up. With their support, he was able to make it happen.
Recently, Petter returned to the shopping center business. He put a strong group together to buy a company, even bigger than Steen & Strøm. With €1 billion it was one of the largest real estate transactions in Norway. One of Petter’s backers was the same guy whose contract Petter didn’t want to compromise, when he got fired.
And he said, “Petter, you have done so much good for us; I will support you.” So they came up with a lot of money, and we bought back the shopping center company. Now, I’m back in the shopping center business as well. It’s full circle.
Petter’s loyalty paid off big-time.
Build a Reputation on Integrity and Win Respect
Reputation is the most valuable currency. It’s better to increase your reputation than your wealth. As Frank Stronach says, “You can always make money, but once you lose the reputation, you can never repair it.”
Ron Sim considers reputation the most important entrepreneurial asset and advises to start building it from the very beginning of your career.
Starting from Day 1, when you are small, your character is the basis of your reputation. Your mindset is the basis of your reputation. Your attitude is the basis of your reputation. And if you don’t get it right, who’s going to support you? Who’s going to give you that credit? Who’s going to help you? Who’s going to believe in you?
You can always make money, but once you lose the reputation, you can never repair it.
— Frank Stronach #BillionDollarGoldNuggets
Cho Tak Wong was following Mao’s words, “To do one good thing is very easy, to do it for a lifetime is very difficult.”
And he did a lot of good things in his career. Believe it or not, he was probably the only entrepreneur in China to give back state subsidies. His company Fuyao got 10 million yuan from the local government to keep an unprofitable factory operating in a crisis and save jobs. Cho Tak Wong managed to make the factory profitable again and then gave the money back to the state, saying the company didn’t need it.
As Naveen Jain told me, “Do everything with the highest integrity, and remember it takes decades to build a reputation and it takes one action to destroy it.”
To do one good thing is very easy, to do it for a lifetime is very difficult.
— Cho Tak Wong #BillionDollarGoldNuggets
If you have a good reputation, people approach you with business opportunities. As with all the billionaires, this was also the case with Hüsnü Özyegin.
Since everyone knows I am a serial entrepreneur, they often offer me a slice of their new start-ups or companies. Some of these were incredible opportunities.
It takes decades to build a reputation and it takes one action to destroy it.
— Naveen Jain #BillionDollarGoldNuggets
Don’t Lose Your Integrity
Jack Cowin warns not to lose your integrity. In his 13 life lessons, integrity is the second point. He read it for me:
If you lose your integrity, no amount of success will be meaningful, and it will produce a hollow feeling when you look in the mirror.
So don’t stray from the path of good.
Cho Tak Wong made it more tangible for me.
Did you see the Indian film The Slumdog Millionaire? The film talks about a young man who used to just be a normal guy. Then luck made him a millionaire, and a lot of people tried to treat him bad and asked him to give in, but he had always stayed the good one, managed to keep his integrity, and then he became a millionaire. There is no magic about it.
If you lose your integrity, no amount of success will be meaningful, and it will produce a hollow feeling when you look in the mirror.
— Jack Cowin #BillionDollarGoldNuggets
Be Respected
Respect comes with integrity.
When Narayana Murthy founded Infosys, he proposed that their vision should be to become the most respected company, not the largest or the most profitable, as suggested by others.
I have always believed that seeking respect from every one of the stakeholders in every one of our business transactions will bring us revenues, profits, and market capitalization. This is my formula for good business.
If you deliver on every promise that you make to a customer, over a period of time, they will realize that you are an honest and dependable company. Similarly, if you follow the finest principles with corporate governance in dealing with investors, they will realize that they can trust their money with you. If you treat your employees with fairness, courtesy, and dignity, they will realize that you are a respected corporation. If you live in harmony with society, they will realize that you seek respect. Therefore, respect is the most important attribute that any corporation must seek.
Let us remember that respect from society is the most important attribute because society contributes customers, society contributes employees, society contributes investors, society contributes bureaucrats, and society elects politicians. So if society is happy with you, then customers will come, employees will join you, investors will invest in your company, and politicians and bureaucrats will create favorable policies for your industry. If you want to seek respect from society, you will have to conduct yourself as a model corporate citizen.
Narayana avoids “anything that will not enhance respect” for him.
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sp; For Cho Tak Wong, “Success is being respected by others.” He is probably the most universally respected and liked businessman in China.
My biggest success is that I have been recognized by all levels of government officials and admired by all the people.
Success is being respected by others.
— Cho Tak Wong #BillionDollarGoldNuggets
What about your integrity, my dear reader? Do you have strong values, or are you cutting corners when necessary? Are you humble, grounded, and committed to do good? Are you reliable and trustworthy? How do you treat people? Are you fair, respectful, honest, and loyal to them? What is your reputation? Are you respected?
- Drifters don’t have strong values; they sacrifice their integrity by taking shortcuts and drown in the chaos they create.
- You can become a millionaire by lying and cheating, but that won’t last for long. In the long run, you get caught and punished. Most millionaires have strong values, but they don’t focus on building a reputation and trust in the market. This sets a limit to what they can achieve in business.
- Billionaires focus on building trust and a great reputation based on integrity and reliability; they win deep respect among the people they deal with.
For more stories on this topic, go to:
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CHAPTER 19
Gratefully Give Back
Service to others is the rent you pay for your room here on earth.
—Muhammad Ali
Acknowledge that whatever you have achieved, it is society that made it possible for you. You have been schooled by it; you have received your employees, customers, and investors from it. Be grateful and “give back.”
You can’t really give back to all the people that have helped you on your way, but you can and should pay it forward to others. What do I mean by that?
The following story from Naveen Jain will explain it to you.
After my first company was very successful, I got a call from a woman saying, “My husband is in ICU and he wants to speak to you.” My first reaction as you can imagine was oh my god, she had lots of medical bills and she wants me to pay them. And I said, “Ma’am, I completely understand. We have a foundation; please send me an email. I will make sure whatever help you need, we’ll take care of that.”
The Billion Dollar Secret Page 27