The more I read about Warren Buffett, the more I respect the man. He keeps things simple and is very direct in his approach. In today’s era of social media marketing, get-in-your face advertising and blowing your personal business horn at any opportunity, Buffett’s approach is pretty simple: maintain your reputation.
Reputation takes time to build and is based on trust and experience/results. Trust and time are the biggest factors in building reputation. Buffett is known for his saying that reputation takes 20 years to build and 5 minutes to ruin. What is implicit in that statement is that to re-build a reputation takes almost as long as it did the first time. And maybe even longer depending on how the reputation was ruined. Trust takes a long to time rebuild and, in some cases, may never be fully restored.
I know of several high profile businesses that had their reputations ruined by poor decisions by managers and company directors. In some cases, the company recovered but not after months and years of very careful reputation management at the hands of a firm that does this as their primary business.
The fact that businesses exist that focus on the reputation of famous individuals and businesses shows how critical it is to image and to selling. Businesses want a good reputation to sell products and services. Famous individuals want a good reputation to sell themselves and, by extension, either their own products and services or that of other companies.
When greed steps in the way, or humility is forgotten, it is much easier to make decisions which may risk the reputation of the business. We are all tempted by these things. After all, we’re human. We are bound at times to get off track. Instead of thinking that it will never happen, it’s more important to put things in place to help us during times when we do.
For me, one of the best ways to keep myself and my motives in check is to surround myself with people who will hold me accountable. I can go to them and they will be honest with me. Sometimes, it is quite painful to listen to. And when that’s the case, I know that I’m taking offense because I’ve gotten out of line.
Buffett similarly has a close network in Berkshire Hathaway and he has crushed the market. He has very few employees and has had the same business partner. In our disposable society, I’m sure it would have appeared easier at times to just find other people and move on. But Buffett has stayed with his small crew. In fact, I’m going to look at this in my next post as it seems to be in direct conflict with almost all the other businesses out there who expand quickly and are fast to partner. I’m really intrigued by this concept of staying small.