Your Reputation

After many years in business, there’s little that surprises me anymore. But one thing can keep me awake at night: thinking about me and my firm’s reputation. It’s taken many years to build it, and one major slip-up, or a series of minor mistakes, could tarnish it forever.

When I think about this subject, I am reminded of an Ole and Sven story. The two friends were in Duluth, standing at the end of Canal Park Drive looking over the beautiful view of Lake Superior. “Sven, do ya see da big ships out in da harbor?” “Ya, Ole, I do,” said Sven. “Sven, I built dose ships, but do they call me Ole da Ship Builder?” “No, Ole, they don’t,” said Sven, shaking his head in bewilderment. They turned around to gaze at downtown Duluth. “Sven, do you see all dose big buildings?” “Ya, Ole, I do,” said Sven. “Sven, I built dose buildings, but do they call me Ole da Commercial Real Estate Developer?” “No, Ole, they don’t,” said Sven, again shaking his head. Then Ole said, “And Sven, do you see all dose homes on da hill?” “Ya, Ole, I do,” said Sven. “Sven, I built dose homes, but do they call me Ole da Land Developer?” “No, Ole, they don’t,” said Sven, shrugging his shoulders. “But Sven, don’t ya know. I only got one lap dance from a dancer at Lars’ stag party, and now they call me Ole da Minnesota Viking.”

The story makes a serious point: You can work a lifetime building your reputation, but one lapse of judgment can wipe out all the goodwill you’ve accumulated over those years. Leaders have a duty to not only protect their company’s reputation, but also their own.

The Most Valuable Asset

Ask chief executives what their company’s greatest asset is and they’ll probably reply, “Our people,” or “Our products.” Only a few more enlightened executives will answer, “Our reputation.” Don’t believe me? Take a look at company budgets and see how much is devoted to defending or growing market share versus defending or improving reputation. Most companies are penny wise and pound foolish when it comes to reputation.

Reputation should be top of mind in everything your company does, from the way the phone is answered and letters are written, to how products and services are delivered. All of these actions create your franchise value or reputation. I believe reputation is the most valuable asset of every business—providing it’s a good one. Your reputation is one thing that’s gained in inches, but lost in miles.

A Single Act

What comes to mind when you read these names: Kenneth Lay, Carly Fiorina, Bernard Ebbers, and Martha Stewart? All were successful business leaders who had reputations for brilliance until scandal filched away their good names and the value of their companies. Years of success were marred by a single act of greed, arrogance, or power mongering. What a shame.

These names may conjure up national news headlines, but the Land of Ole and Sven has a few tarnished reputations, too. What about George Kline, who was one of the Twin Cities’ premier angel investors, until he served time for trading on inside information?

Or what about William McGuire? McGuire became UnitedHealth Group’s leader in 1989, when its revenues were just over $400 million. He built UnitedHealth into a Wall Street darling, and was considered to have the Midas touch by shareholders who became wealthy as a result of their investments. McGuire became wealthy, too, and was one of Minnesota’s—and the nation’s—most highly paid executives. At the same time, he and his wife earned a reputation for philanthropy.