Why reputation matters

Just today we hear of Chrysler recalling 1.9m cars because of an airbag defect and Samsung withdrawing their exploding note7 phones.  As a result their share prices tumble and consumer confidence weakens impacting on future sales. IT software programs are released and then updates are a regular feature as glitches are revealed through customer use.  Car manufacturers apologise for 'fixing' emission readings.   Headlines hit the news media as problem after problem arises.

It seems as though there's more of these being reported than every before so is this just because it's flavour of the month for the media to find 'bad business' stories or is there a growing trend of decreasing reliability of design and performance?  Has the rush to market meant that products are being issued without proper testing?  And what does this do to business reputations?

You could argue that it doesn't do anything to reputation.  Coffee drinkers still go to Starbucks, books and DVDs are still purchased from Amazon despite the furore over taxes and proposed boycotts.   Sure their revenue dipped for a while but it soon rectified itself.  Volkswagen still sell cars.  As far as the consumer is concerned it's business as usual and it's the city boys that fret and wring their hands because there's a paper movement in share price. What difference does it make to the general consumer, apart from a little inconvenience because the car's in the garage for a half-day.

It matters because there's a psychological contract with your customer.  The customer puts a lot of time, energy and thought into their purchase. A strong, unassailable reputation makes that choice considerably easier and can often support a price point that's higher than the competition.  Have the tiniest of snags in that contract and it's like having a pin prick in a piece of cling film.  The security seal is damaged.  Not only that, have another piece of bad news and that tiny pin prick will soon develop into a hole and the hole into a tear.  Once the contract is torn you're swimming with the rest of the fish in a very deep ocean.

It's damage limitation for companies that have defects; damage limitation to reputation through apologies and mea-culpa and then the cost of rectifying the problem with the product and relaunch. Undertake a cost benefit analysis of that whole process and I wonder if by investing similar time and money into ensuring the product or service is right in the first place would cancel it all out.  Plus it would mean that the reputation that matters so much, remains unassailable.

The business that is the Olympics

The Olympics are upon us once more.  Records will be broken, there'll be disputes, accusations of cheating, celebration of success.  Search for any combination of behaviours, systems and processes, targets and league tables, management and leadership and you'll find it in abundance in the whirlpool that is the Olympics.  And one thing you can be certain of, is that things change.

They change from Olympics to Olympics, from discipline to discipline, from day to day.  What strategy you would have had on Monday could be out of the window come Tuesday.  So how do those in positions of leadership cope with the changes?

Perhaps one of the keys can be found in the British Swimming Team and the amazing story of our first gold medal winner of the games, Adam Peaty.

You may recall that there has been a history of difficulties between the coach and the team even back in the days of Beijing. London 2012 was a particularly disappointing medal haul and the team were accusing of being 'molly coddled'  Significant changes were made at the top with new appointments which heralded a new way of working and thinking.  I wanted to pick out three key statements made in a recent interview to The Independent by head coach Bill Furniss.

"We are more focused"

“We work on resilience"

"Setting targets is futile because there is no accounting for what the opponent may achieve"

There is no question that the first statement, focusing on what's important, is central to good leadership and good strategy.   We too often got caught up in the 'noise' that surrounds us which leads to a dissipation of effort and energy into less productive activities. The clarity you gain by focus enables you to make better use of your resources to greater effect.

Resilience is often neglected.  Invariably it's the hard slog that drives down motivation, numbs creativity yet it's the hard slog that's required.  With swimming it's the hours of trawling up and down the pool, spending time in the gym to perfect technique and gain maximum fitness.  It's the same in business.  If you don't develop resilience then where's the inner drive to keep going when things get difficult?

The third might be seen as more controversial.  After all we live our business lives with targets, performance management, KPIs.  What's important to support this approach is the following comment from him. "Swim your best performance of the season and your life when it counts... do that and I'll be a happy chappy ... we will count the medals at the end of the week."

You know your competitor's strengths and weaknesses up to a point.  What you cannot account for is individual performance at specific times which can throw all previous thinking out of the window.  Your competitor might be that much quicker at responding to a crisis, or opportunity than you which means they take the lead.

This is practical, motivational, supportive leadership from Furniss.  He has instilled within the organisation a culture of focus, resilience and released the psychological and potentially negative burden of targets.  Instead he's offered them  the positive driver of doing your best when it counts". 

He didn't select Ross Murdoch, the Commonwealth champion because of a poor time in trials. Murdoch didn't perform to his best when it counted.  It was controversial but it set the marker and the team are responding to it.

Peaty knew when it counted and he's got the Olympic gold medal as a result.