How (33 page)

“Reputation is not about spin. It is merging what is real with what people think about you,” says Charles Fombrun of the Reputation Institute.
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We know that the brain is exceptionally good at recognizing conflicting messages. Thus, integrity is a necessary component of any representation a company or an individual makes. If those to whom you are communicating sense dissonance or apparent conflict between your carefully crafted message and the realities of your behavior, they will quickly turn away. When I think about reputation, therefore, I think about something holistic and authentic, something that fills the interpersonal synapses between one person and another, between one company and another, and between every organization and its various stakeholders. It begins with the individual and extends out to the organization of which he or she is a part.

Values. Continuity. Reputation. To thrive in our transparent, connected world, we need to shift our thinking from
managing
reputation to
earning
it. Reputation cannot be spun like the gossamer threads of a spider’s web intended to catch flies, but must be built, brick by brick—one communication and one interaction at a time—to form a structure capable of sheltering the aspirations of those who wish to live there. You cannot get to a good reputation by cutting corners; reputation is on the square, or not at all.

A SECOND CHANCE

Whereas it may take less now to redefine your career, you cannot do much to redefine your reputation. You build reputation action by action over the course of a business day. Over time, it tends to settle into place. Your reputation is not for your epitaph; it’s like a baseball player’s batting average—very difficult to move up more than a few points towards the end of a season. It takes a long-term commitment to becoming a more consistent hitter and to improving your ability to make contact with the ball, to raise your batting average year over year, over the course of a major league career. Reputation also kicks in much earlier in life than it once did. People used to think of reputation as a legacy issue, something to be considered in the second half of your career; after you became successful, you worried about how your reputation would be viewed by others. Now, employers check the MySpace pages of recruits just out of college. It is as if your batting average is no longer limited to your performance in the majors, but also includes how you swung the bat in Little League; the things you do as a kid stay with you throughout your career. Reputation is built one interaction, one gesture, and one event at a time throughout your life. Even someone like Steve Wynn, a man whose reputation was built on big successes, agrees that building reputation is about the little things, the simple, authentic impressions you make in each interaction. “It’s not about home runs,” he said. “It’s about hitting singles and doubles, one meaningful experience at a time.” In an age when your reputation is built on authentic impressions, the pressure is on to act authentically right from the start.

When Drexel Burnham fell and the high-flying stock market of the 1980s crashed on Black Monday, 1987, Michael Milken became the poster boy for 1980s greed and corporate avarice. Although there was little to suggest that this quiet financial genius was nearly the Machiavellian schemer the press, the Securities and Exchange Commission (SEC), and federal attorneys made him out to be (former New York City Mayor Rudolph Giuliani, then lead attorney for the prosecution, has since expressed full support for Milken’s presidential pardon),
¹⁹
Milken paid the price. Years in jail, the largest fine ever levied in the history of U.S. securities laws at that time, and a lifelong ban from the thing he did best left Milken picking up the pieces of a shattered life and damaged reputation.
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Now, years later, Milken’s valuable philanthropic efforts on behalf of cancer research and public education through the activities of the Milken Family Foundation are helping him restore the reputation he lost, as he helps others.
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It seems Milken evolved from a man motivated by the pursuit of success into a man inspired by the pursuit of significance, and in that transformation, that shift from a focus on the self to a focus on others, he was able to find a solid measure of redemption.

REPUTATION, REPUTATION, REPUTATION

Second chances are harder to come by in a transparent world. It is easier for people to trip you up and, since times are full of uncertainty, harder for people to extend trust after it is broken. The fall down the ladder of trust is often long, and the landing particularly hard. Reputation is the only known antidote. It can inoculate you, to some degree, against the unease that others feel when suspicion enters a relationship. It buys you the benefit of the doubt.

In a world of connection and transparency, getting your hows right means making the shift from managing reputation to building it in everything you do. A good reputation is like a good rope and piton for a mountain climber. Every good climber is going to slip occasionally and sometimes even take a fall. However, when conditions get rough, only a good rope, well secured, will keep you from being blown off the mountain.

The Marlboro Man and Me

In 2001, David Greenberg became senior vice president and chief compliance officer of Altria Group, Inc., the parent company of Kraft Foods and Philip Morris, among others.
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“When I took my current job,” David told me recently with a laugh, “what I knew about compliance and ethics would have fit in a thimble. Altria’s conception of compliance training at that time involved lawyers standing up and lecturing people about rules and procedures.”
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Charged with creating an effective compliance and ethics program for a sprawling organization of more than 190,000 employees, David got turned on to the technology solutions emerging in the industry and began reaching out.

David and I sat down recently at LRN’s New York offices to recall the history of our relationship, a journey that for both of us has proven a profound and meaningful experience. Though to this point in the book I have not shared many stories directly about LRN, and certainly none as long as this, I want to detour from the narrative to relate, with David’s help, a story that truly tested many of the values and principles I hold deeply, and that I think also illuminates many of the ideas we have been discussing in this part.

During his search for solutions, David contacted LRN, and we began a series of informal discussions and information sharing. Altria, as the parent company of cigarette maker Philip Morris, is a company facing reputational challenges because, in the eyes of many, it misled its customers about products and betrayed their trust. But LRN is not in the WHAT business; it’s in the business of HOW, and when companies reach out to us, it is because they want to embark on or further their journey toward getting their HOWS right. When David contacted us, I saw a genuine opportunity for constructive engagement with an organization and its 190,000 or so people around HOW they conduct their business and pursue their goals. Through David’s leadership, Altria seemed to be committed to rebuilding trust by getting more of its HOWS right.

So after a time of general evaluation, David began a very formal process, contacting potential vendors like us to make capabilities presentations. At that point, LRN was seven years old, a leader in our field but still growing. David was one of the leaders in the field crafting a very rigorous, comparative, and thorough process of deciding what Altria would purchase and with whom the firm would form a relationship. He set up a selection committee and issued formal requirements, which he sent to all potential bidders or partners. Though we were working with many large companies at the time, many of our relationships were not won in formal, competitive beauty contests; they just kind of happened. Early in the millennium, though, things were changing rapidly for us, and as markets mature, systems formalize. Still, to us Altria was a Goliath, and establishing a relationship would have meant a lot to the growth of our business.

Unbeknownst to us at the time, six months earlier David had hired a small consulting firm to generally advise Altria in the area of compliance and, specifically, to help spearhead this selection process. Soon thereafter, a member of the LRN sales and services team brought to my attention that the principals of this advisory firm had a major stake in one of the vendors competing against us to supply the online training. “They were transparent about that,” David told me, “and I believe it was as much an advantage to us as a conflict. Altria is a hundred-billion-dollar corporation and always does what’s in its best interests. These partners had a lot of knowledge about the industry that could help us get up to speed, and I knew to ask about and assess their bias. The level of formality and structure in our process gave me even more comfort. We had a committee, we had a very elaborate process, we had standards and criteria, and we had lots of people who were going to be a part of the decision making who had absolutely no business relationship with or stake in this advisory firm.”

LRN had invested a great deal of time and resources in getting to know David and his team. We were proud of our solution, felt that we could be a good partner for Altria, and had developed a lot of excitement around trying to become its partner. But the presence of these advisors seemed to us a clear conflict of interest, and when we found out about it, we really struggled with what to do. In a competitive situation, you obviously don’t want your trade secrets revealed, and you don’t want anything that you consider proprietary or confidential to wind up in the hands of a competitor. If this competitor obtained passwords and IDs to go online and review our courses, they would have insight into our material and our approach to adult learning and instructional design. They would be armed with things that companies do a lot to protect. Also, we were very unsettled that Altria hadn’t disclosed the advisors’ involvement at the beginning of the process, that we had to discover this on our own.

So I reached out to David, for whom I had developed some respect, and communicated our unease. I expressed our feeling that this looked like a conflict of interest on its face, and while the appearance of conflict doesn’t always mean conflict, we certainly felt vulnerable in this instance. We argued back and forth. David saw it much like hiring a national law firm to help select a regional counsel. I saw it more like hiring one tobacco farmer to help you choose who to buy tobacco from, even though he grew tobacco himself. Finally, David suggested a compromise, offering to exclude the advisors when we talked about pricing and when we disclosed our passwords. It was reasonable common ground, so I agreed to proceed.

A short time later, however, we received an e-mail requesting our passwords, and Altria’s advisors were on the distribution. The dissonance between the ground rules David tried to set up and what Altria did was a blow to the process. We lost confidence that our vulnerability could be protected, even as an administrative matter. “I thought that the information was controllable, that I had a choke point on the process, but I didn’t,” David said. “Someone probably hit “Reply All” on some e-mail, which let information into someone else, and maybe it ended up in the hands of someone who didn’t know the agreement and innocently sent it along.” More important, we grew deeply concerned about our competitor. Why would these advisors want to be in this potentially conflicted situation? They shouldn’t
want
to see our passwords. These concerns multiplied, distracting us from our ability to move forward with passion and turning into real trepidations about Altria itself. Could we really trust these people?

I lost a lot of sleep over this. On the one hand, it is really hard to tell a Fortune 10 company to go jump in a lake; you want its business and you certainly don’t want a competitor to get it. We were a leading company and I felt we had the solutions that a leading company like Altria needed. I felt we could win. Could I really sacrifice a big win, and all it would mean to the company, on the altar of a principle? On the other hand, there was something gnawing deeply at my belief system. Whether or not the people at Altria saw it as a conflict, David and his team didn’t seem able to honor the fact that we did.

Ultimately, I felt that this was flat-out wrong and the advisors should not participate in the process. There was a conflict, and for us to go forward, they needed to go away. So I called David and made my case. I told him that although Altria didn’t see the situation as a disabling conflict, LRN felt very disabled by it. We felt we would be unable to come to a meeting and be open and transparent, to discuss our strengths, weaknesses, and future plans in a candid way, or tell Altria everything it needed to know to understand who we were.