Building Credibility: Reputation and Diplomacy

Manuel Bermejo. Professor. IE Business School

2 December 2013

Reputation is a key asset for both organizations and individuals. That’s why we should work hard to build ourselves a good name, with the help of strategic thinking. 

I have always attached a great deal of importance to the apparently intangible aspects of business managements. This applies to all types of organizations, regardless of their size. They could be large listed corporations, family businesses, or start-ups. The complexity of the current business scenario, which I tend to call “the change society”, makes it absolutely necessary to adopt increasingly sophisticated management practices. In other words, having a good product is no longer enough. That’s why I believe that companies have to not only attend to pressing matters, which they tend to do naturally as part of the day-to-day workings of a firm, but also the important matters, which require us to occasionally step up to a strategic thinkings vantage point from where the view will enable us to organize our “Napolean” moments.

There are two concepts in particular that are becoming increasingly fashionable, and they are reputation and corporate diplomacy. This is because organizations (firms, institutions or countries) have discovered that reputation is an effective tool for creating value. We are in an era of the fifth profit and loss account, where it is not enough to pay dividends to the shareholder, and where you now have to have a far more complete, peripheral vision to meet the requirements of all the stakeholders involved. If you ignore the needs of any one of them, there is a risk that, for example, a single client who is unhappy with the way he or she has been treated posts a video on Youtube trashing the reputation of your organization with all the serious consequences that such an action could have. It is not surprising that in a report drafted by McKinsey Global Survey headed “The Business of Sustaina­bility”, the 3,500 CEOs of multinationals that were asked about what they thought would be the most important area over the next 5 years in terms of generating sustainability and value for their business all cited the same one, namely reputation. In order to examine these issues in greater depth, I suggest that you review the report on Leadership and the Change Society published by myself and Professors Juan Cahinero and Juan Luis Manfredi.

And it is not only institutions that should take care of their image. Individuals must also ways take particular care of our reputation. Unlike companies, it is possibly the only or main asset that we possess.

I have always liked to think that, regardless of whether we work for ourselves or for someone else, we should always really look after our clients. We have to put ourselves in their place if we really want to meet their needs. They should feel that we give them value for the money they pay us, that the exchange is a fair one. If you work for yourself you will think that I am stating the obvious, but company employees should feel the same way. The company you work for could be your only or best customer, which means that my argument is even more important in your case.  As Tom Peters says, “We are the CEO's of our own companies: Me Inc”. Hence we have to start by building our credibility, building our personal reputation, and practicing the art of diplomacy.

We can tackle the personal reputation process on three levels:

- Your own credibility: Professional credibility is consolidated through a blend of experience and education. Draw up your own strategic plan with this mission as the basic objective. Never stop investing in yourself. Never stop learning. You have to educate yourself to show the kind of leadership that is expected of you. Guru and father of management, Peter Drucker, insisted that leadership “can and should be learned.” Think that every event you attend, every meeting, every course you do, every interview you give to the press, every presentation you give to a client, every deal you negotiate with a supplier, every conversation with the person sitting next to you on a plane, no matter how insignificant it may seem…. These are all opportunities to create a good image. In order to build your personal reputation you have to go through life with a proactive attitude.

- Your credibility in the eyes of your team stems from being able to handle things like being able to set an example, generosity, the equity or coherence that underlies everything it takes to handle the people in your circle or sphere of influence.

- You gain credibility in your environment when you apply the reasoning of John D Rockefeller when he said: “Reputation is about doing things well and making it known”. It is a very direct recommendation that should serve as a basic guideline where individual diplomatic action is concerned.

In short, organizations and people should apply both rigor and strategic thought to the task of building their reputation because it is their greatest asset. As the great Miguel de Cervantes once said: “A good name is worth more than riches”. So now you know what you have to do – get to work on your credibility.

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