Fadi Ghandour On Cash, Culture And How To Build A Real Company

This post originally appeared on Forbes.com, in 2015.

We are in a moment in our culture in which entrepreneurship seems glamorous. Startups get TV shows, celebrities start companies and entrepreneurship itself is seen increasingly as a more powerful force than government or philanthropy for solving the world’s problems.

But the actual day-to-day work of building a real, lasting company is anything but glamorous.

Nobody makes this point as compellingly as Fadi Ghandour, the founder of Aramex.

Many Westerners don’t know his name, but Ghandour is one of a select few people who has led a company from startup through scale-up, to global, publicly traded giant. Leaders rarely succeed at each size, because the skills needed for each phase are so different.

Ghandour built Aramex from nothing over 30 years into a Fed Ex-like logistics company in the Middle East, Africa and South Asia. The company employs 14,000 and trades with a $1.3 billion market capitalization on the Dubai stock exchange.

Three years ago, Ghandour stepped away from the CEO to become vice chairman, and now spends much of his time — day in and day out, he says — helping entrepreneurs in his region. He’s an investor in 75 of them so far.

I interviewed Ghandour in Amman over Christmas, and asked him what advice he gives entrepreneurs. First of all: Don’t buy into the glamour.

“On many days, building Aramex, I woke up thinking, I don’t want to wake up today. But I have to,” he said. “I never felt there was something in the organization that I didn’t have to do, from delivering packages myself to waking someone up in the middle of the night.”

“There is no glamour in it.”

That theme runs through Ghandour’s advice, which is unusually succinct and practical. After he stepped away from his hands-on role at Aramex, he became an investor in startups in MENA.

• Cash is king. “I am one of the investors in this new dot-com stuff. But if their business model doesn’t show a clear path to cash positive, I don’t get it.”

As an investor, he looks for capital efficient businesses, and not those that require the founder to spend a lot of time raising money.

“You lose focus on your people,” he said. “I spent my life building a sustainable company. I only think about what businesses require to be sustainable. Without cash you’re going to die regardless of what people tell you.”

• Pay the most attention to people. “Assets are irrelevant. Don’t spend your money on buildings and machines. Spend more time on people, because corporate culture trumps everything else at the day.”

Technology is crucial in the knowledge economy, he said, but “the uniqueness and differentiation comes from your culture.”

• Look inside the company for leaders. “Most of the senior people at Aramex … have been with the company for decades now,” he said. “I don’t believe that stuff about needing to hire people from the outside to innovate. “

Ghandour successfully handed over the Aramex leadership to a successor he had groomed inside, Hussein Hachem. The company’s net profits were up 15% in 2014 compared with 2013, and its revenue was up 10% year-over-year.

Ghandour pointed out that if you don’t have a handful of people groomed to be your successor, you risk having the board foist a choice on you.

“It’s a management failure if you don’t have people on the inside to take over,” he said.

• And, by the way: Business school is not terribly worthwhile. “It teaches a lot about psychology. It teaches networking, which is important after you graduate,” he said. “Everything else is irrelevant. With all due respect to them.”

Laughter always helps: And one addendum, which might say something about how Ghandour manages his growing role as an international business leader. While he takes the role seriously, he takes himself lightly. “Laughter always helps,” he says, and seems delighted when a turn in the conversation catches him off guard.

What is the perfect personality for a leader 

People spend a lot of time thinking about the key personality traits of leaders and tend to romanticize their roles as the indispensible people at the center of companies. The reality is more complicated, and as Ghandour suggests, much less glamorous. Growing evidence supports the idea that entrepreneurship is more skill than talent, and that you get to be a better one by dint of a lot of hard knocks.

And while your character is important, what might be as important is how you relate to others: the day-to-day work of getting along with people. Researchers including Bob Sutton, author of The No Asshole Rule, have suggested that sociability is one of the most successful elements of entrepreneurship.

Ghandour started “courier week” at Aramex, where every person at the company who sits behind a desk spends a week on the job delivering packages. In fact, Ghandour seems to have embraced empathy before it ever became a buzzword.

“If we love our front line operators, we have to understand what they’re going through. You go out in the heat and the cold, knocking on doors, finding addresses, and delivering packages.”

“Some clients give you 10 or 15 dollars and they want to piss on you.”

Ghandour, whom you can find occasionally engaging customers on Twitter, is still eschewing glamour. In his new role as an investor, he said, he feels keenly the burden of other people’s money. “If you made it once, people expect you’re going to make it again. When you’re starting you have nothing to lose. When you’re where I am, the expectations are so much higher.”

So why do it? He is focused on helping his region and the young entrepreneurs he works with. And he wants to stay relevant.

“If you stop, then the past is just to be celebrated, then you’re nobody now,” he says. “I have the ability and luxury and luck to be able to say here what I want to do. I might fail at it, I might succeed at it, but it’s my choice.”