Some things you learn as a kid really stick. Like putting your knife and fork together on the plate when you have finished eating with the fork pointing upwards.
Another big one in our family was “always keep your word”, which was often accompanied with “well, you made your bed now you lie in it”.
Of course, I didn’t realise at the time that I was getting a lesson in ethics that would stand me in good stead for all my business life.
I remember about 20 years ago we were pitching for a big client when we were told that we had to match a competitor’s cheaper price to get the account. I matched the price, even though it was $1million under the cost of providing the service. It turned out that I had been deliberately misled.
Sometime later I employed a bright new senior executive who found out about the story and wanted to sack the client. I refused, saying that we would provide our service as agreed because we had “given our word” and renegotiated at the end of the contract. Over the years, we stayed with our client and ultimately, we both did well.
You might have read of the shenanigans in the Victorian Parliament on Good Friday. “A pair” had been given to the opposition, meaning that the absence of members from one side would be matched by the other side, so that the number of parliamentarians voting would reflect the margin between the parties. The Victorian opposition broke their word and the two members of the upper house, who were given “a pair”, reappeared in parliament and defeated the government’s bill.
I don’t care what the bill was. Keeping your word is paramount.
As Charlie’s good friend Robbo says, “if you can’t keep your word, you can’t keep your credibility”.
According to Princeton University lecturer Rachael Ferguson, “word is bond” became a legal agreement between merchants in the 16th century prior to written pledges. She also noted that since the establishment of the London Stock Exchange in 1801, its motto has been dictum meum pactum - word is bond.
I operated for 40 years on my word and trust with the Packers and Murdochs of this world, with two rather odd variations.
I remember when the brash Alan Bond briefly took the reins at the Nine Network. Over a lunch at the much-loved “Tre Scalini” restaurant with Vance Lothringer, the long-term sales director of Channel Nine, we hammered out a deal, as we used to say.
I had a habit of scribbling notes of meetings on bits of paper, or paper tablecloths if they were available.
“How could a cloth be paper?”, says Louise.
Anyway, I scribbled away as I talked to Vance about our new deal which amounted to hundreds of millions of dollars. Vance and I had done this many times before.
When we reached agreement, we shook hands. Deal done I thought. But not quite. Vance apologetically advised me that the new owners insisted that everything had to be in writing.
Ok Bondy I thought. I can work with that, so I ripped the corner off the tablecloth, dated and signed it and gave it to Vance who went happily on his way.
'Can't have your cake and eat it too'
At another time, Rupert Murdoch was putting a lot of pressure on his local people to increase their advertising revenue. The heat was on his wonderful Director of Sales, Ray Atkinson, who had produced incredible results for the newspaper empire.
Meanwhile, I wanted to keep rates to a minimum. But after three years of no rate increases despite inflation, something had to give. I recognised that a rise was inevitable, but it was vital that I did what I could to keep it below the double figures that Ray was pushing for.
Finally Ray and I agreed that I would increase rates by 7.5 per cent at a future date. It was a formidable increase, but better than it might have been.
“I’ll have to have that in writing,” said Ray.
Our conversation had covered earlier his 60th birthday, which was the day before our meeting.
“Ray, did you get the birthday cake we sent you?”
“Yes,” said Ray becoming puzzled.
“Didn’t you read what was written on top?”
“No. We just ate it”
“Well,” I replied, “you already had it in writing. The message on the cake was ‘Happy Birthday Ray - plus 7.5 per cent’. Ray, it’s a lesson in life; you can’t have your cake and eat it too.”
Robust and honest relationships are the keys to success in business and life generally. An old friend used to say, “don’t do anything you wouldn’t teach your grandkids”.
If you ask me, I reckon “keeping your word” will remain good advice for many generations to come.