Social media and modern communications have transformed the world into a small marketplace where all ways of buying and selling of every imaginable kind of product and service are available.
Now Amazon is talking about floating warehouses and delivery by drone; erasing yet another barrier to supply, demand and distribution. In an environment of intense competition between companies and states for profits and revenues, we have seen numerous geographical barriers to investment fall away.
However, none of this has succeeded in removing an ageless commercial value: The reputational capital of the trader himself.
I have always been broadly in support of liberalising the economy and erasing detestable protectionist measures whose only effect is isolationism, stagnation and a failure to progress. Competitiveness is the foundation stone of progress. This is what allowed Western economies to flourish.
Meanwhile, populist demagogues like Hugo Chavez took their national economies to the brink of collapse. Although Venezuela floats on a lake of oil, this country has astonishing levels of poverty, while the country’s leadership resorts to blaming its failures on Western plots. They could not admit that it is the wasteful and counter-productive Chavez philosophy of frittering away oil revenues which brought the nation to this state.
The claim that all tradesmen and businesswomen are of a common nationality isn’t an unfair one; many of them share a common outlook and similar world view. Although some nations are distinguished by the crooked, corrupt and cronyist nature of their economies; in an open global economy, no businessperson flourishes without sharing common values of honesty, transparency and protection of their reputation.
This open global economy develops from strength to strength when we succeed in bestowing our skills and experience upon our offspring in the next generation. We can pave the way for them to establish their own contact network which we spent a lifetime building. They must learn like we did that the oil which greases these relationships is the oil of trust, honesty and integrity.
Thus, we teach our children that money doesn’t buy reputation. Reputation is the rock upon which we build our company brand and commercial success. Reputation is built over years of demonstrating our integrity and honesty; not through our words, but our actions. A single lie or act of disloyalty to business partners brings this whole edifice crashing down around us.
There are some people who believe that good business sense means craftiness, cunning and double-dealing. This may bring you success once, but no more than that; because afterwards nobody will deal with you.
I remember as a youth when my father left me in charge of his jewellery business, admitting to a client that the first time she’d come to the shop I’d accidentally short-changed her. I recall my toes curling in embarrassment at admitting my stupid mistake. But she then became a regular customer because she saw that I’d dealt with her honestly. That day I learnt a valuable lesson which always stayed with me: Honesty pays!
Over the course of my long career I’ve dealt with global brands like BMW, McDonalds, Nivea and General Motors, and I’ve never yet entered into a dispute with any major client which had to be settled in court; because my priority was always to start by building an open and clear business relationship.
The only times I’ve resorted to the courts is following encounters with those who have no concern for their reputation and who are simply trying to make a quick buck. In the Bahraini, Arab and GCC business community there are more business figures than we give credit for who value honesty, integrity and trust.
In olden days, those embarking on the Haj pilgrimage often had the custom of entrusting their valuables to a reputed local businessman. This was in an era where the Haj could take months or years, and it wasn’t guaranteed that pilgrims would make it home safely.
On one occasion a man left 10 gold lira with a cloth trader. However, after returning from his lengthy pilgrimage he became confused and went to the wrong trader asking for his money. This bemused businessman went to his safe and produced the requested amount of gold coins. The pilgrim later realised his mistake and went back to the trader who he’d taken the coins from and asked: “Why did you pay me what you didn’t owe?”
The businessman replied: “I feared that you would doubt me if I disagreed with you. I therefore paid you in order to secure my reputation, which to me is beyond all price.”
These Arabic morality tales were told to us when we were young with a purpose; understanding the immense value of our reputation and the trust of others. There are truly no more valuable lessons that we could teach our children.