Talk about reputation seems to be everywhere. Audiences have mashed together, fact checking on what companies and individuals say is instant, media is hungry and shouty, and businesses face new existential pressures.
We like to keep abreast of thinking on reputation, and a recent book by David Waller and Rupert Younger proved a good prism to consider what reputation in business means today.
The Reputation Game: The Art of Changing How People See You (Oneworld Publications 2017) says that:
“Successful players of the reputation game are better paid, have access to better career opportunities, live happier lives and are able to recover more quickly from setbacks.” Fortunately, that was in the conclusion, or I may have been too depressed to read on.
The authors do a good job in analysing the main drivers of reputation, both of organisations and individuals, and their relatively straightforward framework makes sense.
Reputation has two aspects – capabilities and character. Capabilities reputations – he is a good plumber, Goldman is good at M&A – are hard earned and sticky. Character reputations on the other hand – covering moral and ethical aspects – are much more volatile.
Reputations are grown and managed through three dimensions or pillars: behaviours, networks and narratives. How you act, who knows you and talks about you, and what you say yourself.
The book makes the point that there is no simple relationship between behaviour and reputation, because reputation is about how others perceive you. Your reputation passes through networks, and how we manage our networks offline and online is critical.
Networks can be open or closed. Closed networks, such as families or alumni, often feature strong relationship ties. Information travels fastest in closed networks, often by word of mouth, with a high level of trust. They are also dense, with most of the nodes connected to many other nodes. It is thus hard to behave badly in closed networks, and financial markets relied on this for centuries. In open networks, information often moves more slowly, and these networks are often much less dense. You may well be more marginal in an open network; it offers more opportunities to engage new people, but levels of trust are much lower.
The third element is message or narrative. Reputations are influenced by what an organisation or an individual says about themselves. Today, the authenticity of your narrative is central; inauthentic narratives can backfire as people access information so easily. The authors however suggest that you need to balance authenticity with being “sympathetic to context change”. I read this as being about the need to reinvent yourself somewhat to changing circumstances, without losing authenticity.
Today we also see many more contested reputations. Many organisations, and indeed individuals, must deal with “reputation activists”, who are systematically engaged in “narrative rebuttal”. Political tactics have moved into business life. Regulators have also become acutely aware of the power they hold, with the smallest regulatory actions sometimes triggering a huge reputational ripple. One strategy for firms is to create “reputation wedges”, with narratives that put their firm’s contested reputation into context within a credible categorisation (e.g. responsible lenders versus irresponsible ones).
I would question two main assertions in the book.
Firstly, it is said that character reputations, in contrast to capabilities reputations, are “up for debate and discussion on an almost constant basis. They are flighty, but they are also perhaps the most visible and important factor underpinning your different reputations”. That can be true – the revelation of serious criminal activity or a pattern of “inappropriate” behaviour will alter your reputation irrevocably. In other situations, however, a strong character reputation gives you “credit in the bank”, so that a misjudgement or mistake (such as an injudicious statement) does only temporary damage, especially if you handle it well. Networks, especially closed professional networks that know you well, are unlikely to instantly change their view of your character.
The trouble today is that social media can expand your network – negatively – just at the time when you don’t want that. While professional buyers of your services may not themselves care about your views or personal behaviour, they know that others do. They see what a Google search shows, and act to limit their risk. Staying below the radar and dealing only offline within a closed professional group can often mean you have no positive online reputation as ballast for a crisis.
Secondly, the authors consider that brand is an element of reputation, writing: “We can think of brands as being what we want to be seen as, and reputation as how we are seen in reality”. I’m not sure that’s quite right. While hard to measure, both product brands and corporate brands have a value: customers will pay more, buy more, be more loyal. It is therefore, like reputation, about how a brand is perceived externally.
While brand and reputation are not synonymous, in practice corporate brand is often used as a close alternative to reputation. It seems more logical to think about corporate brand and reputation as overlapping circles. Brand more naturally encompasses some product and service attributes and advertising/promotion, while reputation much more clearly covers “character”. For individuals, reputation will usually be a more useful term than brand, Oprah perhaps excepted.
The authors, both with communications backgrounds, are right to highlight the unhealthy silos of communications and marketing, concerned about reputation and brand respectively, saying “It became all too easy to see reputation simply as a reflection of brand”. They’re also right to note that reputation is too simplistically linked to media coverage in the minds of many chief executives.
The book digresses into many stories to illustrate its thesis, from business, politics and history. These range from Caligula to Jay-Z and from Tyco’s Dennis Kozlowski to VW’s Martin Winterkorn. It’s an enjoyable read with a lot of learning (plenty of German phrases) and graft (speaking to Madoff in jail for example) on display. It could have been more tightly edited and the joint authorship shows in places. Some more practical readers will struggle with the relevance of epithets and cognomens (e.g. Richard the Lionheart), and John Profumo is not, perhaps sadly, a name that resonates across generations.
Inevitably, the case studies tend to be big figures running big organisations, whether BP or the Roman Empire. The book quotes Michael Skapinker, the FT columnist, saying that “a Deepwater Horizon lurks in every organisation”. Well, maybe in most large organisations. For midsize companies – whether a hedge fund or a manufacturer – commercial success and financial performance remain much bigger challenges than reputational risks. What is certain is that positive reputation can help grow companies. Building reputation can be done, but networks and narratives – and indeed behaviours – are not always easy to get right and to scale. What’s also true is that not only market dynamics are changing rapidly, but so is the broader societal context for reputation (think of UK companies with only 250 staff reporting gender pay gaps).
As the book says, “We all have multiple reputations for something with someone – recognising this enables you to prioritise and invest in the reputations that matter”.
Finally, without falling into the self-help category, the book gives you some homework and tips. Am I a “network broker”? (they tend to hear news faster). How central am I to my network? How “portable” is my reputation? And how ready do we keep our reputations ahead in this VUCA world? (volatile, uncertain, complex, ambiguous).