Don't 'Break' Reputation; Too Hard or Too Easy; Success and Reputation Hits Part of Legacy; Clues Available to Corporate Misconduct

Reputation Notes this week about wisely protecting reputation health

In this Reputation Notes issue, brief insights on 1) avoiding “breaking” your reputation 2) how we can be either too rough and too lax on ourselves 3) a high-profile leader is stepping down after monumental success and some real dings against their reputation and 4) there are clues being provided to boards and organizational leaders about misconduct and emerging scandal.

Bernard Coleman
Head of Employee Engagement at Gusto and formerly of Uber

Coleman talks from experience about the critical importance of healthy reputation in Reputation Matters: Build Your Brand, Don’t Break it.

It’s valuable to keep in mind that while Coleman writes from the perspective of large-organization leadership, we can learn from his points, even as individuals, part of small firms, working within an organization or solopreneuers. Here are some of Mr. Coleman’s key points:

There are two things that help a company stand out — the product (or service) and the reputation. A lot of companies focus on their product, as they should but many don't pay enough attention to their reputation.

The reputation of every company is essentially their bumper sticker for which they're known and ideally the reputation is positive versus notorious.

(Healthy) Reputation is easily undone.

When I worked at Uber, we had an amazingly innovative product but we also had a terrible reputation — a toxic culture punctuated with ethical lapses, leadership woes and a whole host of case-study worthy issues of bad culture that deeply wounded Uber's reputation, so much so that even now, the product is undervalued relative to the market.

NOTE: he didn’t mention the significant problems with sexual assaults of customers. Now, back to Mr. Coleman’s points:

When you have a solid product and a great reputation it attracts customers, it attracts talent, it engenders trust, and most importantly, both customers and employees will go to bat for the company. It's much easier to grow market share when you're well liked.

For instance, if there is a crisis, hiccup in the product or a big customer service issue, the company gets the benefit of the doubt and people may be more understanding because of the strength of the reputation.

However, when a company has a bad reputation, it can repel talent. People won't apply and the great product you're developing is more difficult to launch due to the negative perception of the company because you don't have the people needed to build it.

Furthermore, if the reputation is really bad, employees will leave faster than you can hire them. That's a real cost on a number of levels -- the resources it costs to advertise roles, the people hours to recruit, interview, hire, and onboard.

One of the most key aspects of brand reputation is consistently saying and more importantly, doing the right things.  A lot of companies get caught up in what I call the "see/say" problem — where they'll say one thing but do another.

(Healthy) Reputation is easily lost and can have an epic domino effect, because once you lose the trust of your employees, your customers and your stockholders, it can be a long way back to redemption, if at all.

“Sometimes we are too hard on ourselves and criticize our mistakes to an unhelpful degree. Sometimes we are too easy on ourselves and let excuses run our lives.”

James Clear
Behavior science expert and writer
Author of New York Times bestseller, “Atomic Habits”

Sheryl Sandberg, who led Facebook’s business rise to unimaginable success and later became a role model and supportive ally for many career women with her books, has decided to step down from Meta.

New York Times reporters Mike Isaac, Sheera Frenkel and Cecilia Kang wrote about it.

What intrigued me most about the article was the reputation component of it. Sandberg was a powerhouse executive who achieved greatly and became a media sensation. She accomplished tremendous things in business and by supporting and inspiring people. In a way, Sandberg additionally became an idol.

She, as humans often do, also had difficulties and pain with her reputation.

Some points from the article that stood out to me:

“Have we gotten everything right? Absolutely not. Have we learned and listened and grown and invested where we need to? This team has and will.”

NOTE: This type of common comment, “Have we gotten everything right,” is similar to “I’m not perfect.” Both attempt to divert attention away from the errors in decision making and unsavory actions that should not have occurred.

People who communicate like this know that critics don’t expect anyone or any company to get “everything right” or “be perfect.” Communicating like this often comes across to critics as defensiveness, deflection and avoiding responsibility.

Back to the article:

“Though they presented a unified front to the public, Mr. Zuckerberg grew frustrated with Ms. Sandberg’s responses to the crises. Ms. Sandberg privately told members of her staff that she didn’t agree with some of his decisions on content.”

NOTE: Knowing how to respond successfully in crises is a skill that is not easy for most executives because it’s not a natural response. In Facebook’s trials and tribulations, Mark Zuckerberg was unhappy with Sandberg yet it’s also important to consider how Zuckerberg’s decisions and commands put Sandberg in a position where crises developed and intensified.

Being associated with Zuckerberg profited and badly harmed Sandberg. Together they became business and financial titans and together they got into a lot of government and reputation trouble.

To Zuckerberg’s credit, he did pay Sandberg a respectful, appreciative and impressive compliment upon her announcement to step down.

“Sheryl architected our ads business, hired great people, forged our management culture, and taught me how to run a company,” he said.

Corporate scandals follow a pattern, Michael Blanding writes about in Harvard Business School’s Working Knowledge publication.

“…you start to realize is that the problems that have been uncovered have been going on for a very long time,” says Dennis Campbell, a professor of business administration at Harvard Business School.

The major problem, Campbell says, is this wrongdoing is not coming to light soon enough. Now for highlights from Blanding’s article:

In an attempt to discover whether these problems could be exposed earlier, Campbell conducted an experiment with Ruidi Shang of Tilburg University in the Netherlands. To find upstream indicators of culture gone sour, they scraped employee reviews from Glassdoor.com, a website where employees can leave subjective anonymous reviews about their employer.

Harnessing machine learning to analyze text, they found that the reviews could serve as canaries in the coal mine of corporate misconduct, pointing to cultural factors that might eventually result in scandal earlier than they would otherwise attract attention.

In a business environment where ethics are paramount, the findings may offer managers and compliance departments a new way to stop fraud before it starts.

“When we looked at Wells Fargo relative to the average in the banking industry, we could see it rise and then spike from 2009 to 2013 when their misconduct was happening,” Campbell says.

Even more important, the measure was able to predict violations before they were exposed by whistleblowers or the press. “Where the rubber meets the road is whether this measure says something about future misconduct,” Campbell says. “And [we found that] yes, it does, at least a year ahead of time.”

“There could be all kinds of internal platforms where employees are talking and sharing information, and that you could apply this high-level machine learning to in an aggregated way,” says Campbell. “It could help you understand pockets in your organization where these cultural issues are popping up so you can get a handle on them.”

“Why would a smart person do that?”

The late Jim March
Professor and political scientist

Michael Toebe is the author of Reputation Notes and the founder and specialist at Reputation Quality, a practice serving and helping successful individuals and organizations in further building reputation health as an asset or when necessary, ethically and successfully protecting, restoring or reconstructing it. Connect, if you like, at LinkedIn.