Doing Business Local Style

Hawaii's unique way of doing business

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Illustrations by Jon J. Murakami

Remember 2004?

That year, a BlackBerry was the height of executive cool, while the first iPhone was still three years away. Facebook was being coded in a Harvard dorm room, and MySpace ruled the emerging world of social media. George W. Bush was running for re-election, and Barack Obama started the year as an obscure Illinois state senator, largely unknown even in the state where he was born. The world has changed a lot since 2004.

That was the year Hawaii Business published “Local Style for Lo-Los,” our initial look at what’s distinctive about doing business in Hawaii. We described a business style founded on Hawaiian values and influenced by Asian (particularly Japanese) sensibilities. We wrote about small businesses that would let regular customers pay later if they’d forgotten their wallets. And we had some advice: “Build relationships, then do deals.” “Check your ego at the airport.” “No talk stink.”

In 2004, we were still smarting from the parting shot of Evan Dobelle, former president of the UH system, who managed to commit all three of those no-nos when he hightailed it back East under a cloud of overspending allegations and then sourly wrote in the “Chronicle of Higher Education” that Hawaii needed to “come off the plantation.”

Ouch. “Are the Islands a land of aloha,” we wondered, “or a hopeless backwater?” Would the “high-speed, needed-it-yesterday world leave tradition-bound Hawaii behind?”

A lot has changed in 10 years. Have we?

“Nope,” says Richard Brislin, a professor emeritus at UH Manoa’s Shidler College of Business Administration, who loomed large in our 2004 article.

Mike McCartney seems to agree. The president and CEO of the Hawaii Tourism Authority sums up Hawaii’s business culture in 2014 this way: “No talk stink. No make big body. And no hog cheese.” For non-pidgin-speakers, that’s, “Don’t badmouth people; don’t act entitled and arrogant; and don’t take more than your share without giving back more than you get.”

One business owner, who asked not to be named, said she’d recently heard a well-meaning, Hawaii-loving mainlander describe the state’s way of doing business to a potential international client as “Aslowha.”

In Hawaii, when we meet you, we still ask what high school you went to. We still bring food to meetings, although the food itself is more likely to be Paleo friendly or gluten free. And we still want to know who you are before we do business with you.

Island State of Mind

Why haven’t we evolved? Because the conditions that created our business style haven’t changed. Hawaii is an island state, more than 2,300 miles away from any other habitable landmass. Greater Honolulu may be classified as a mid-size American city, but no other U.S. metropolis is surrounded on all sides, for thousands of miles, by far more fish than people.

That means there’s no “next-best” option for relocation. Tired of Los Angeles? Get on the freeway and in a few hours you can be in San Diego or Las Vegas. If you move from New York to Boston, you can still see your Big Apple buddies on the weekends: it’s two hours by train. Seattle has Portland; San Francisco has San Jose and Berkeley.

In Hawaii, you can’t get in your car and drive far in any direction, so we keep running into each other: at Longs, at Zippy’s, at Costco. And whereas in other parts of the world there might be six degrees of separation between people, “in Hawaii, it’s more like two,” says Alex Kagawa, a budget analyst at the state Department of Education.

IQ360 principal Lori Teranishi recalls a trip to Longs on the day after she’d unloaded the Matson container that had carried her belongings from the San Francisco Bay area back home to Honolulu: “I had no makeup on. I just looked terrible. It was 7 in the morning. And even though I had been away for 24 years, I saw three people I knew.”

Yet we love it here. Hawaii residents came in dead last, tied with Montana and Maine, in a 2014 Gallup poll that asked people across the country, irrespective of actual plans, whether they wanted to move out of their state. In most of the contiguous 48, an itinerant life and starting over someplace new are still romanticized.

What happens when you live on an island that’s irreplaceable to you? It means that what local dealmaker Jeffrey Watanabe said in 2004 is still true. “You better not make messes,” he said back then. “I’m sure in a big city like New York or Chicago you can do that and move on. But not in Hawaii.” There’s no place to move to.

“What are big metropolitan cities built on?” asks Mark Noguchi, chef and co-founder of community food group Pili Hawaii, “They’re built on commerce. And they’re built on big business. To survive there, you have to have what I call metropolitan mindset. Lead, follow or get the (bleep) out of the way. Here in Hawaii, it’s a little bit different,” he says, because very few people are here just for their careers.

Don’t Burn Bridges

Glenn Furuya, president and CEO of the business consulting group Leadership Works, describes two styles of doing business: “circular” and “linear.”  A circular, Asian- and Polynesian-style culture is “collaborative and interdependent.” A linear, Western culture is “focused, assertive, independent.” A critic of Hawaii’s more circular methods might say that a linear culture gets you somewhere, whereas a circular culture lands you right back where you began. But in interviews for this article, it’s another circular metaphor that dominates the description of the way we do business: What goes around, comes around.

Living in an island community “does moderate our behavior,” says Teranishi. “It does keep us honest more than in other places. You’re not going to behave in certain ways if you know it’s going to come back to bite you.” On the mainland, she continues, “There’s more anonymity, just because there are so many more people – a feeling that, ‘Well, I can burn this bridge because there will be another one.’ Here, you burn one bridge and it stays with you for a long time.”

Is our business community really nicer? Yes, says Noguchi – at least in public. “You hear it all the time: ‘I can’t stand the way you do business here in Hawaii. You have to be nice to everybody.’ That’s Hawaii, you know, and they knock it, but that’s how it is.”

Go Slow to Go Fast

In our June issue’s feature on leadership, Hawaii Business quoted Hawaiian Electric Industries CEO Connie Lau as saying that people and companies in Hawaii most often don’t have a single bottom line: “In Hawaii, we talk much more about double or triple or even quadruple bottom lines. … We’re not so strongly financially oriented; we also care about quality of life, balance of life and preserving what’s special about Hawaii.”

Having multiple criteria for success means a more complicated business equation than just financial profit and loss. When you and the person on the other side of the boardroom table share an island and a community, when you’ll run into each other at Longs, when you both intend to stick around, your questions become longer range: Is this good for Hawaii? By doing this, am I strengthening my place in the community or weakening it? How is what we’re doing going to affect others?

Ben Godsey, president of ProService Hawaii, has a term for this long-range business approach, borrowed from psychology: Hawaii has a “relational culture.” A more transient, dispersed population focuses on short-term deals with a clear-cut outcome, because social and other reverberations won’t be felt; the person you’re doing business with may disappear next year and, in the interim, you’re not as likely to run into them in any other context. A “transactional culture,” says Godsey, asks, ‘I’m doing this for you; what are you doing for me?’ Here, it’s a relational culture. Over a long period of time, what are the relationships you’re building?”

Furuya agrees: “In Hawaii, relationships come first, transaction comes second. Go slow to go fast.”

Missouri-born Amanda Corby, principal of the public relations and outreach firm Under My Umbrella, learned that the hard way: “I was of the mindset, ‘OK, we’re going to sit down and get to business.’ But sometimes there needed to be a lunch just to get to know each other, with no business (discussed) whatsoever,” says Corby. “It took so much longer to build that trust. But once you have that trust, then you can start talking business.”

Trust takes time to build, says Godsey, who worked in big metropolitan areas on both coasts before moving to Hawaii. “For the first few years (in Hawaii), I’d say it was an obstacle.” But Godsey, who was raised in Ocean Springs, Mississippi, “recognized there was a similarity to where I grew up, where long-term relationships mattered, and reputation mattered.” He had to prove that he had skin in the game and honorable intentions, and part of that was patience. “I just kind of watched and talked to people. At some point, people start to take you under their wing and share with you more.”

 

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