11

Pearls of Wisdom

After the solid gold Rolex incident, I made it one of my goals to learn more about the protocols of doing business internationally. I believe it’s essential to have a strong moral compass and to make sure you never, ever compromise yourself in any way when you’re in business. Little did I know how soon I would encounter such a situation.

I was in Japan working with a Japanese trading company to develop a new product. I verified that the product had the properties needed to enable us and meet our requirements. I even flew in our engineers to test and verify the quality and properties. They gave me the go-ahead to buy the product. It was a multi-million-dollar contract for five years, and so it was an important deal for the company.

I started negotiations in the morning and concluded the deal with the trading company in the early evening. After the long day, I returned to my room in the hotel and saw that the message light was on. I called down to the front desk and was told I had a package. I asked for it to be delivered to my room. When I unwrapped it, expecting it to be business materials, there was a beautiful gift box from the company with which I had just concluded the deal. Inside the gift box was a necklace, a bracelet, and earrings of Mikimoto pearls—which are considered to be the highest-quality pearls in the world—along with a thank-you note

My first reaction was panic, because I knew it’s not appropriate to accept gifts from anyone you do business with, but this was a problem I had not confronted before. I recognized early in my career that even the perception of impropriety is a problem. I had heard that businesspeople in some parts of the world were looser about the practice of gift giving, and I also knew, of course, that there were deals that were downright shady. I knew right from wrong! I would not have any part in anything that would even appear improper or inappropriate. Period.

I knew immediately that I must take action and ensure that my integrity was sacrosanct. In business (and in life), your word, your handshake, and your integrity are who you are. You cannot compromise. I called my boss in the New York office, who was the president of the company, and told him what had happened. I began with the good news: I had concluded the deal, we were getting everything we needed, and everybody was excited. Then I said I had a problem, and I told him about the pearls. I told him that I couldn’t even imagine what they were worth but that they looked very expensive. I said, “I want you to know they sent me this gift, and I want you to know that I’m going to refuse it. I’m taking it down to the front desk, but I wanted you to know what happened so that no one in our company or any other company will ever be able to say that I accepted a gift inappropriately. I’m returning it now.” Then the president of the company said, “That’s very smart, very wise of you. I appreciate you calling, and I’m not surprised you did.”

As soon as we hung up, I called my associate from our Hong Kong office, who was traveling with me, and said, “Get the Japanese trading company on the phone. Wake them up in their houses if you have to, but get them on the phone.” Fortunately, the people I had been dealing with in Japan were still in their office, and I spoke to the American representative with whom I had negotiated the deal. I said, “I can’t accept this: it’s a very nice gesture, but you need to come pick this up.” He tried to make light of it by saying, “But it’s just our way of saying thank you.” I said, “I’ll tell you how you say thank you to me: you deliver everything you promised, on time. But I cannot accept a gift. That is not business.” He said, “We are in Japan, and gifting is an accepted part of doing business.” I told him, “I am an American, and gifting is not part of our business or our culture, and you should know better!” Case closed. Emphatically, I told him, “I am not accepting this gift, so you need to have someone from your office pick it up at the front desk. Otherwise, one of the young ladies at the front desk of this hotel will look very beautiful in a set of Mikimoto pearl jewelry.” I hung up and took the pearls down to the front desk.

This incident is important because I truly believe that you should never accept anything from anyone. If you do, you become beholden to that person. And even if you aren’t actually beholden, that person owns you. You must be above reproach at any level in a company and especially at the most senior levels. This keeps you objective and free of any entanglements, and it allows you to base decisions on what’s right for your company, not what might be right for you personally. Trust me, this is perhaps even more important: when you put your head on your pillow at night, you can sleep soundly.

Some people might wonder, What constitutes a gift? I believe flowers are an acceptable gift from a business associate, because even though they can be expensive, it’s a socially acceptable way of showing someone that you appreciate what he or she has done but it doesn’t obligate that person in any way. Also, the flowers are displayed for all to enjoy.

With respect to business lunches and dinners, there are some very big companies that make it clear that they cannot accept a supplier paying the bill for a meal; because of the size and scope of their business, it may appear that the company is making decisions on the basis of those shared meals. Personally, I don’t subscribe to that, although I do believe that when you have lunch or dinner with someone, there needs to be a specific business purpose for that lunch and it shouldn’t be just a social event. However, if you’re the type of person who might be compromised by a meal, I suggest that you pay your own way so that you won’t be tempted.

I continue to be surprised at how many people don’t understand or accept this idea, and I think it’s a really important lesson to learn. I’ve known buyers who have even asked for samples of merchandise, which is a poor business practice. They may think they’re trying to show the designer or the vendor how much they like the merchandise; still, that’s not a good way to do business. You should not accept anything free from anyone. There are cases, for example, in which a vendor may want a woman to wear-test a dress or a man to wear-test a suit. When they give an item like this to you, make sure to write a detailed report on that product. You need to be above reproach, and as I explained above, even the appearance of impropriety is a problem in my view. That’s my personal policy, and I recommend it to everyone reading this book. These are my pearls of wisdom and part of your personal business success manual.