The Importance of Integrity & Reputation

Whether it’s in a business relationship, a friendship, or a marriage – the importance of integrity can not be emphasized enough. I have been forced to think about this topic quite a bit over the last few weeks – due to a friendship that at this point, looks as though it has unfortunately, and catastrophically, ended.

Without identifying the friend, nor their situation, I’ve found myself stuck in a situation that has forced me to re-evaluate the importance of staying true to one’s own values. The problem is, I see my friend making a multitude of errors in their life that has hurt many people. They have sacrificed quite a bit over the last few weeks due to this – and yet, they continue to follow a path that from my experience, will not dig them out of the hole they’ve created for themselves.

One of those sacrifices has been their integrity. The person I thought I’d known for the last few years – now, I hardly recognize. When all of this started, I promised them that as a friend, I would not tell them what they wanted to hear – but what they needed to hear. And, they said they would not want things any other way. So, about 10 days ago, I had to do one of the hardest things I’ve ever done. I had to bring to their attention, the fact that I know the reasons behind their recent choices. And, I didn’t do this in a judgmental way. Rather, I was trying to show them how their current path could lead to more problems.

The problem is compounded by the fact that this person has been one of my best friends. They feel horribly guilty over the pain they have caused others. And, since my warning to “be careful”, they have ended all contact with me. Yet, I have no regrets over trying to warn them – since, it would be a violation of my own sense of integrity, as well as a violation of the promises I’d made to them as a friend, if I hadn’t brought this to their attention.

The tough thing about living a life of integrity – is it’s not an easy path. Whether it’s a friend, a spouse, a business associate, or a customer – taking the path of least resistance may seem at the time to be the best approach. It avoids confrontation at the moment. It allows you to avoid the pain and discomfort of having to face someone that is offended. And, there’s always the excuse that “I can just avoid this now and deal with this later”.

Unfortunately, unless dealt with immediately, the longer you go without dealing with the issue, gives the person that you’ve offended that much more time to question your integrity. And may damage the relationship to the point that you loose that customer permanently. Or the spouse. Or business associate. Or…as in this case…possibly a friend.

Reputation research has verified what you were taught as a kid - reputations are hard to earn and easy to damage. We filter the behavior we experience through the lens of its reputation. Behavior consistent with the reputation is accepted at face value while events inconsistent with the reputation are discounted. And, once a reputation begins to move in a positive or negative direction, its momentum is extremely difficult to reverse.

From a business perspective, studies have shown that even a small positive increase in a company's reputation results in a significant increase in business value, while a negative drop in reputation results in a decrease in business value. For example, a +1% improvement in the reputation of a company is accompanied by significant increases in that company’s value. Unanticipated, however were the strength of the impacts of negative changes in company reputation. A minor decrease in reputation (-1%) has 34 times the impact than an equally minor increase in reputation (+1%)!

Looking at the current economic crisis is a perfect example. A strong positive business reputation attracts customers, investors and employees. This has great benefits for a company because it will book more business, have an easier time raising money and recruiting employees. One of the great gains of a positive reputation is the loyalty it generates in customers and employees. Loyalty will cause customers and employees to stick with a company through tough times. A good reputation also makes a customer more likely to give a company the "benefit of the doubt". This will make a customer more likely to tolerate a huge mistake and to not resort to the courts to settle a dispute. And, may give that company a competitive advantage over other, less reputable companies

It’s also important that when we end up in a situation where our trust is broken, that we let our own sense of integrity derive the path we should take with that person, company, or organization. Many times, there may be underlying reasons that were out of their control that caused the fault to occur. So, giving them “the benefit of the doubt” is never a bad thing. But at the same time – once should never compromise their own integrity in that process. To do so – may cause others around you to question your integrity just like you’re questioning the integrity of the person or company that broke your trust.

How do you know if you’re a person of integrity? Simple. There is a wonderful quote from Thomas B. Macaulay. “The measure of a man’s real character is what he would do if he knew he would never be found out”. As well as another one from Martin Luther King Jr. – “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy”. And, finally, one from Thomas Jefferson – “In matters of style, swim with the current. In matters of principle, stand like a rock”.

PS. In the event that my friend reads this (which is doubtful) – I would hope they would call me – as a matter of principle, I don’t abandon my friends – especially when I know they are feeling bad. ☺

Blogged with the Flock Browser

Thoughts on things "after the election"

Now that the election is over, and we're now inundated with the media's "Obama-mania" - I have been thinking about what all of this really means.

I just read an article on CNN that Obama is planning on "rebranding" the United States. The full article appears at http://www.cnn.com/2008/POLITICS/11/19/obama.world.image/index.html, but the gist of the piece is that although he's poised to re-brand the United States image in international markets, his actions will have to live up to his rhetoric.

I, for one, don't think that this is going to go well for him. Simply because I don't see how anybody, at this point, could do it. The damage we've suffered within the international community over the last 8 years has been huge. From a branding perspective, when your brand has taken a hit - even if your customers want your brand to recover, and want to believe in you, turning your brand image around quickly is extremely difficult.

Think of General Motors. Up until the early 70's, General Motors could do no wrong. They built large, gas-guzzling vehicles that had gobs of power, but were horrible for the environment, and burned through fuel as if it was always going to be cheap and plentiful. Between tightening emissions and a gas crisis in the early 70's, they tried to turn on a dime, building cars like the Chevy Vega - pieces of crap that rusted on the showroom floors, that broke down constantly, and depreciated to the point of being worthless about the time they drove off the dealer's lot.

35 years later, GM has never truly recovered. And, they've done a wonderful job of repeating their mistakes of the late 60's - early 70's - and are now facing bankruptcy without a huge injection of taxpayer money (which is really what a bailout is) - to keep them afloat. Now, yes, I understand that much of their problems are also due to UAW demands driving up labor costs, keeping their cars from being price competitive to other competing brands. But in terms of overall quality - there is still the perception that GM vehicles are not as reliable as, say, a Honda. Even when the quality of their vehicles has improved to the point where they may very well never break down.

Does this mean that people want GM to fail? No. But they've had 30 years to turn around their brand perception, and they've had the help of some of the best marketers in the business. Obama - he has 4 years - or less - to turn around the United States brand position. And, he also has to focus on our wars in Iraq & Afghanistan, an economy in crisis, all while fulfilling the expectations of every voter that believed his promises enough to vote for him.

As a country, I think it's in our best interest to support our new President. But, it's not just his responsibility to improve our country's image overseas. It's our job too. A 2002 National Geographic study indicated that nearly a third of young Americans could not locate the Pacific Ocean. So, go learn a language. Learn about another culture. Befriend someone that you might have just met from another country - and learn about their experiences growing up somewhere else. And, if you travel overseas - be humble - and appreciate the country your visiting - learn from it, and bring the best of it back here. Our country was built by people that brought their culture here - let's show the rest of the world that we can still learn from them, rather than impose ourselves on them.

It might just make Obama's job a little easier.

Blogged with the Flock Browser