Warren Buffett is one of the most acclaimed businessmen of modern times, and for a reason. The “Oracle of Omaha” is a source, not just of business advice, but practical discussion of your reputation and what it means. Much of his most famous advice is on the impact of reputation on businesses.
Here are a few quotes from Warren Buffett about reputation, as well as a discussion of what you can learn from them as you work on building the right online reputation for your business.
“When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.”
Simply put, talent and skill in one area doesn’t automatically translate to mastery in all areas. In business, as in life, a good way to wreck your reputation is to jump into waters feet first, assuming the water is clear and without any rocks.
Don’t underestimate the importance of reputation on your business. If customers come to associate your brand with failures or things they don’t like, it is incredibly difficult to win back their trust, even if you turn things around and do everything right. The negative association will put a drag on all of your other activities.
“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
It’s not a secret that you’re often defined by the company you keep, fairly or unfairly, but it’s also true the friends you have can push you towards certain actions and away from others. Take a hard look at your associates and yourself, and ask if perhaps that the people you’re with might be dinging your reputation—and pushing you into dinging it yourself.
For example, take the common business maxim, “It’s better to beg for forgiveness than to ask for permission.” This attitude is often used to justify risky business decisions or cutting corners. Applied in a limited context, this way of looking at problems can lead to success and rapid growth. But if this is the mantra of everyone in your business, it’s bound to be applied to situations that are likely to cause lasting reputation harm. Make sure there are people around you whose behavior is not simply driven by short-term gain at all costs.
“Only when the tide goes out do you discover who’s been swimming naked.”
Buffett meant this as a lesson about exposure; often it’s not until financial markets go sour that you know who’s got a sound plan for keeping their money growing and who’s just been lucky.
But the concept extends to reputation as well. You can build something of a reputation by talking a good game, whether it’s about your industry or about yourself, but sooner or later, you’re going to have to take action. What you ultimately do is what sticks in people’s minds.
For that reason, a good business reputation is always based on being able to deliver on your promises. Make sure you structure your company to be able to do that.
“A public-opinion poll is no substitute for thought.”
To put this in other words, just because something is the opinion of a lot of people doesn’t mean it’s the right thing for your business. Before taking any position, or taking any action, look hard at your motives for doing it. If everyone in your industry is pursuing steep discounting and volume sales in order to turn a profit, maybe you would be better served by a different approach, focusing on higher quality, better customer service, and slightly less competitive prices. Or the opposite may be true: the point is that just because everyone says things work one way doesn’t mean that’s how your business will build the best reputation.
“It takes 20 years to build a reputation and five minutes to ruin it.”
There’s yet to be a more succinct way to sum up how much rests on thinking ahead when it comes to your reputation. This has only become truer as the Internet has increased customer advocacy and made it harder to hide past mistakes. Before taking any action, then, remember to look at the issue from a reputation angle. What’s the worst that could happen? What is the likelihood that unfavorable scenarios will unfold?
If you can do this, you’ll be much closer to following the business advice of one of the shrewdest businessmen in America.