The Chamber of Commerce of Metropolitan Montreal

Prem Watsa’s 7 guiding principles for business success

CCMM - Prem Wasta

Fair and friendly acquisitions! That is how Fairfax Financial Holdings Limited received its name when founded 33 years ago. Its Chair and CEO is philanthropist billionaire, Prem Watsa. While he may not have a household name, his story is definitely one to remember and offers many lessons for anyone currently running a business or thinking of launching a new project.

Prem Watsa arrived to Canada more than 46 years ago from his native India and has since managed to become of the most successful businessmen in the country. After purchasing a failing trucking insurance company by scrapping together the initial $5 million dollar investment – the toughest money he has ever raised according to Mr. Watsa – he has managed to grow his company into a multi billion-dollar empire with hundreds of thousands of employees around the globe and 14,000 here in Quebec. His long list of acquisitions includes the Quebec staple, St-Hubert through Fairfax affiliate Cara (now Recipe), and Toys “R” Us and Golf Town stores, just to name a few. Over a quarter of a century later, Fairfax Financial is still thriving on and off the stock market.

While many refer to him as the “Warren Buffet” of Canada, Mr. Watsa rarely makes public appearances. That is why it was a delight when during a recent visit to the Chamber, Mr. Watsa told guests about the experiences and challenges encountered on his rise to the top. He attributes most of his success to the values instilled in him by his family and his struggles learning the ropes as a newcomer to Canada.

“Treat people the way you want to be treated”. That is the golden rule underlining Mr. Watsa’s path to success. He went on to recite seven guiding principles he believes a business must follow in order to succeed.

1. Think long term:All business affairs must be thought out on a long-term basis and rash decisions must be avoided at all costs. Fairfax does not forecast on the short term and they not promote themselves in order to obtain their 15-minutes of fame.  

2. The company is not for sale:There is no offer that is too good to refuse. Shareholders know that the company can’t be sold and employees know they can build long-term and stable careers. Mr. Watsa has even gone so far as to develop a plan for his company once he, as President, passes on…

3. Decentralization and minimal bureaucracy: The holding company run by Mr. Watsa operates with just over 30 employees. Despite having thousands of employees in countries all over the world, Mr. Watsa says it is amazing what one can achieve with little to no bureaucracy in the workplace. In his words, the President is ultimately held accountable for the actions of the company.  

4. Success does not come at the expense of family: A non-negotiable point for Mr. Watsa. Life is sometimes difficult and family must always come first.

5. Always maintain a team-oriented approach: One must be very fearful of individuals with large egos who demonstrate arrogance in the workplace. In his words, anything in the world is possible if you don’t pay attention to who gets the credit at the end of the day.

6. Give back to charity: “You must do well to do good”. Mr. Watsa’s companies strongly believe in giving back to their communities and donate 1 to 2% of their profits to charity. Over the years, they have donated a cumulative $167 million to charitable causes.

7. Never compromise your integrity: Mr. Watsa shared an anecdote with guests about how during a recent acquisition, he vehemently refused to compromise employee’s pension plans to make an extra buck. It is never a good idea to take advantage of someone who has their back push against a wall. 

For Mr. Watsa, Canada was built by businesses and when they do well, everyone reaps the benefits of that success.