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Most of the men agreed that it is hard to love one person for the rest of their lives, a group said wisdom, someone said to forgive and forget.
However, the response that got my attention was from this soft-spoken gentleman clad in a rather too bold pinstriped business suit.
He said that it is harder to build than to destroy a good reputation. As he went on to clarify his answer, he said that building a good reputation requires effort, patience and time.
Whereas destroying a good reputation only requires a single moment of madness.
As I went over his statement, I considered the many ways that my reputation has opened doors for me. So what is the secret to building a good reputation?
Many of you might recall the story of Enron Corporation, a United States conglomerate with interests in energy, commodities and services based in Houston, Texas.
The company enjoyed a solid reputation — it did the right things for the right reasons and garnered substantial credibility.
According to Wikipedia Enron grew wealthy due largely to marketing, promoting power, and its high stock price and this led to it being named “America’s Most Innovative Company” by the magazine Fortune for six consecutive years, from 1996 to 2001.
It was on the Fortune’s “100 Best Companies to Work for in America” list during 2000, and had offices that were stunning in their opulence.
Enron was hailed by many, including labour and the workforce, as an overall great company, praised for its large long-term pensions, benefits for its workers and extremely effective management until the exposure of its corporate fraud.
The first analyst to question the company’s success story was Daniel Scotto, an energy market expert at BNO Paribas, who issued a note in August 2001 entitled Enron: All stressed up and no place to go, which encouraged investors to sell Enron stocks, although he only changed his recommendation on the stock from “buy” to “neutral”.
It was later discovered, many of Enron’s recorded assets and profits were inflated or even wholly fraudulent and non-existent.
One example of fraudulent records was during 1999 when Enron promised to repay Merrill Lynch & Co’s investment with interest in order to show profit on its books.
Debts and losses were put into entities formed “offshore” that were not included in the company’s financial statements, and other sophisticated and arcane financial transactions between Enron and related companies were used to eliminate unprofitable entities from the company’s books.
Enron eventually filed for bankruptcy protection in the Southern District of New York during late 2001 and ended its bankruptcy during November 2004, pursuant to a court-approved plan of reorganisation, after one of the most complex bankruptcy cases in US history.
The fall of Enron will be known for decades to come as one of America’s greatest business tragedies.
Naturally, good deeds also boost corporate reputations. The bottom line is that companies need to build a strong relationship with consumers, even if they do not sell chips and chicken or pizza.
However, safeguarding image should now be top priority for the CEO. So pivotal is reputation that one New York consulting firm came up with a Reputation Institute. The winner was Barilla Holding, the Italian pasta maker, with annual revenue over US$5 billion and a reputation score of 87,79 out of a possible 100.
Barilla was not the only Italian company to make the top 10. We have a lot to learn from the Italians. People do seem to love food so much because it is mostly consumer product companies that won.
The bottom end of the list included a few corporations whose names have become synonymous with bad behaviour. Tyco and Exxon Mobil featured in those.
If we were going to carry out a study in Zimbabwe to determine organisations with the best or worst reputations, I would bet you some of our biggest corporations would feature easily because of a reputation of poor service delivery.
According to the Reputation Institute companies that give to social causes did well in the survey. Social responsibility does contribute to building a good reputation
Many would testify that reputation is a fragile thing. Like an infant, it requires constant feeding. Be aware that consistency is crucial.
If you live up to your reputation 99 percent of the times but fail to do so 1 percent of the time, you risk disproportionate damage in which you will let down a highly influential party in your network.
A good reputation should not be an end in itself but rather a natural outgrowth of your striving to reach your goals.
Let’s face it, we only have influence over our reputation; never control. Corporate reputation will continue to be an extremely important topic for organisations in the near future.
With recent trends on the changes in risk management, technology, and risks in general, organisations will constantly have to evaluate and monitor the impact of risk challenges on their reputation.
Based on recent developments, more transparent reporting may be necessary in valuing the reputation of organisations.
I see a future where reputation may not only be identified as an asset on the balance sheet but one which affects investor confidence, staff recruitment, stakeholder attitudes in its capacity as relationship capital.
Till next week, may God richly bless you.
l Shelter Chieza is an Adviser in management issues. She can be contacted at [email protected]
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