Business DNA: Your Word is Your Bond
Andrew Stotz and Khalid M. Hashim
Khalid was raised in Calcutta and Bombay in India by a middle-class family with a long tradition in shipping and trading, but he represents the first generation to actually own such a business.
Khalid wanted to go into shipping early on, but his father insisted that he gain a university degree and explore all areas of the industry through internships and jobs before he committed to sea transport.
His father was his first important mentor, the second was a ninth-grade dropout “genius” who inspired with his extensive hands-on knowledge of the ocean trade, and the third passed on the essence of how to become an entrepreneur.
Since 1989, Precious Shipping Public Company Limited (PSL) has been engaged in the shipment of small Handysize and Supramax tramp freight. It was listed on the Stock Exchange of Thailand in 1993. Khalid describes his business: “In a very simple way, we connect cargoes between exporting countries and importing nations – as simple as that. That’s what we do – carry it safely, correctly, and without any problems.”
Company DNA: Precious Shipping
The focus of this interview was to try to understand the company’s DNA. Now that we had a little bit of a background on the company, we wanted to drill down to find the unique essence of what differentiates PSL.
DNA is the molecule that encodes the genetic instructions used in the growth of any living organism. One of its most significant properties is its ability to replicate itself. So when we think about the DNA of a business, it’s not about the written values of the company, but rather the way that the values of the company come alive. We could also think about it as the way that the employees and the customers experience their interaction with the company.
Khalid found a huge disparity between the ease and reliability of working with the operators of larger ships versus those of smaller ships. “We went to the bigger sizes where, at that time, there were just something like about 560 to 600 ships. It took you two minutes to do the business, and there was 100% reliability. We looked at the spectrum and said: ‘If you look at the larger sizes, you can be sure that everything will go smoothly. When you come to the smaller sizes, you can almost be sure that everything will go wrong.’”
To Khalid, this stark contrast represented a major opportunity. “We said: ‘If we’re going to form an asset base in shipping, it must be in this size, in the smallest size, so that we can provide a reliable service that most people will pay a premium for.’ So when we went into ship owning, we started buying smaller ships though we had cargoes literally covering the entire spectrum of dry bulk. And that’s what has driven the company and that’s why we stayed assiduously only in the smaller sector and never venturing into the larger sizes.”
Leader DNA: Khalid M. Hashim
What was your biggest mistake or challenge or difficulty throughout your career? How did you face it and what did you learn from it?
KMH: Difficulty in the sense that we had the financial crisis in ‘98 and ‘99. At that time, Precious Ship – ping would have folded; and to keep the company alive (I remember this quite clearly) we had a meeting with our bankers and we needed a moratorium from them.
At the meeting itself, the first thing I did was I told all of them: “Listen, guys, we made a mistake as management. Here’s my resignation letter; it’s signed. If you think that this will solve the problem, I’m prepared to tender it in. I own shares in this company in a large way. Don’t worry. They will remain sealed in a trust so that it’s not that I’m walking away from the company and taking my shares with me. No. If I’ve made a mistake, I want to pay for it.”
And, of course, the reply from the bankers was just the opposite. They said that they were very pleased with my offer. They said: “We decline this offer. We want you to continue to stay. In fact, it will be only be in the event of default that either of you will leave the company.” Having got that done, what I then did was tell them: “I’m prepared and will take a 10% haircut on my own personal salary,” which I did.
The rest of my executive team didn’t follow suit, which sort of disappointed me; but the next year, they all realized that by my having taken the haircut, the bankers became extremely supportive. All of them also took a 10% haircut the next year. When we did that, the bankers just fell in love with the company and said: “These guys are willing to take the pain.”
Our board of directors, of course, got quite upset with the whole thing, and they said: “Listen, this is not correct. You are the guys working on this company. You’re working really hard. You’re trying to make this thing work. The situation where we’re at has been completely outside your control. It’s a crisis that has enveloped all these nine, 10 countries in this region, and it’s not your fault.”
They said: “Fine. Since you’ve already put all this down in writing to the bankers, we won’t disturb this. But the day we start making profit, we will give you back pay for all the things that you have not taken.”
This was such a big challenge for us to overcome. By doing this simple thing, being transparent…first of all, acknowledging that it’s our fault and taking responsibility for it and then taking a haircut in terms of salary made such a huge difference that the rest of the process was a breeze.
So, start with the right principles…and then, everything will work out.
KMH: Absolutely! Like I’ve said, even in the first story, once you’ve given your word, don’t go back on it. Similarly, like this one, when you make a mistake, acknowledge it. Work from there onwards. Become a partner with the people involved. Tell the stakeholders: “It’s not us and them but it’s all of us together.”
What was your proudest moment in your career?
KMH: I guess, the proudest moment was when I was given the ‘Lifetime Achievement Award’ (2012 Seatrade Asia Lifetime Achievement Award) in shipping. Generally, they do that when people have retired. I was still very active. I got this award, I think, the year before last. It just tells you that if you do the right things for the right reasons, even your entire community will recognize you for your efforts. For me, that was really the crowning moment.
From all that you’ve learned over the years, if we could just bring it down to one short statement that our readers or the readers can take away, what would that statement be?
KMH: I would say, “Your word is your bond”, which is the motto in shipping. It’s absolutely paramount in your lives. If you do that, generally speaking, you will be successful.
The next question would be: what’s one personal trait or habit in your daily life that’s helped you to achieve success?
KMH: I think Thomas Jefferson said it best. He said: “The harder I work, the luckier I get.” And, I would say that I’ve been born under a lucky star, and it also means that I work exceedingly hard at what I do.
Key Takeaways
- Learn from the experts – To become successful, find the right mentors who will share their experience with you and train you
- Manage your risks – PSL has no common ports, meaning it has no geographical concentration risk. Its fleet is spread 50:50 between the Pacific and the Atlantic oceans, which is how PSL diversifies away risk.
- Find an unserviced niche – Khalid realized early on that no other shipping companies could provide reliable service in the smaller-size sector, so that became the niche for PSL. Today, the company has “become like a brand name within the smaller sector.” To stay in the smaller sizes and never venture into larger sizes has become the DNA of PSL’s business
- Work with integrity and accountability – Khalid’s motto is “Your word is your bond.” Another core value for him is, “when you make a mistake, acknowledge it” and take full responsibility, even if you are not the sole cause of the problem. Doing so is always the first—and often the most important—step in rectifying the problem at hand
Learn more about how Khalid built a successful career and company on fundamental principles you can put to work in your professional life today!
Download the full interview (10MB pdf)
What do you think about Khalid’s Leader DNA? How do you like the Business DNA interview? Would you like to read interviews with other business leaders?
Feel free to share this article with your friends.
DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.