How (31 page)

Conversely, the company can no longer assume that its corporate reputation supercedes that of its personnel. In a transparent world, people can see between the lines of what you do and discern HOW you do it. Nuance becomes revealed, and reputation accrues to those companies whose individuals represent those nuances to the world. As we become more interconnected, more responsibility is shifted to frontline personnel, and more personnel are pushed to the front lines. They become the face of the company; through their actions, they have a profound effect on how the organization is experienced by the market. Thus a company becomes the reputational sum of its parts, and its reputation becomes more vulnerable to the actions, both positive and negative, of those individuals. The transgressions of a single actor can bring a company down.

To have a reputation that is worthy of merit, others have to impute something to you, that you are a good leader or a good executive, that you are consistently creative or a reliably hard worker, that you treat people well and fairly, or that you are honest. They only do that if they trust you, because
reputation is a series of mutual connections
. Consider reputation, therefore, as the sum of the trust circles you have developed over time, radiating out from you across companies, industries, and areas of endeavor. You build a good reputation when those who encounter you—employees, co-workers, and customers—trust you.

And whom do we trust? Those who are consistent, to whom we ascribe and impute integrity, those who say what they mean, mean what they say, and always follow through. “The ability to be consistent in life is one of the most precious and powerful things,” famed Las Vegas developer and hotelier Steve Wynn told me. “Franchise comes from consistency, whether it’s hamburgers or people.” Over the course of the last 30-plus years, Wynn has built a series of high-risk projects—including the Mirage, Treasure Island, and Bellagio hotels—each more successful than the last, on the strength of his personal reputation. His personal brand has become so synonymous with a memorable experience that he autographed his latest project, the Wynn Las Vegas resort. “I’ve been successful because I’ve consistently given people an experience that is not only exciting, but occasionally unique. Consistency is a measure of predictability and integrity, and you can’t make it without integrity.” If you have integrity, Wynn is saying, you can generate trust, and if you have the trust, you can build a reputation.

To then extend that reputation—for others to contribute to it with high praise or support—they must in turn put
their
reputations on the line. If I call a manager in our New York office and ask her opinion of someone I am considering entrusting with an important project, her evaluation also reflects on my estimation of her. If she accords that individual high praise but the person does not measure up, that New York manager’s reputation is going to take a hit in my book. I will have less confidence in her ability to evaluate talent. Her reputation is dependent on the strength of the trust circles she perpetuates. It may not be a critical hit, but it will be a hit nonetheless.

Acting in consonance with your reputation creates trust. The people you deal with begin their relationship with you aware of your reputation. If the interaction they have with you reinforces, extends, or at least is consistent with your reputation, they can more easily extend trust. Thus, reputation, combined with experiences that support it, propels trust. If, however, you fail to meet the expectations set by your reputation, you introduce dissonance into a relationship. The inconsistency between what is expected and what you deliver creates distraction. Dissonance and distraction, as we know, bring friction into play. Potential partners, confronted with conflicting messages, will raise their defenses and slow down the process of dealing with you in order to gain more time to evaluate the situation and make a wise choice.

Dave Chiu and Didier Hilhorst, young master’s students at the Interaction Design Institute Ivrea, an Italian nonprofit organization dedicated to interactive design, recently developed a dream project they called RentAThing. A small, handheld device resembling an iPod, RentAThing “is a tool for negotiation that provides additional information about the reputation of the parties involved and enables smoother transactions.” RentAThing represents one visionary step down the road to literally “trading on your reputation.”
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When two people want to transact a piece of business—Chiu and Hilhorst use the example of renting a rake—the person who owns the rake would consult his RentAThing to evaluate the other person’s reputation for renting garden tools. Armed with this information, the owner could price the transaction according to relative risk; a lower reputational score would mean a higher rental price, and vice versa. The renter’s rake score could be combined with other reputational scores—say, for returning library books on time or responding to phone messages in a timely fashion—in order to achieve a higher overall trust level, resulting in a lower rental price.

Chiu and Hilhorst look forward to a day, in the not-too-distant future, when wireless connectivity will allow machines and individuals to instantly share reputation scores, no different than a credit score, allowing the information in the RentAThing to apply to a variety of transactions. “Instead of silos of reputation, with various services, companies, and individuals developing isolated reputations,” they write, “RentAThing provides a centralized means of managing and developing a single reputation.”

In his 2003 novel,
Down and Out in the Magic Kingdom
, Canadian author and digital-rights activist Cory Doctorow posits a “post-scarcity” world in which everything is free, available based on a person’s reputational score, which Doctorow calls “whuffie.” Whuffie is accrued or depleted according to a person’s favorable or unfavorable actions, and serves as actual currency in a world without money. Everyone knows everyone else’s whuffie instantly (through a chip implanted in the head—isn’t that always the case?), and everyone has the ability to increase or deplete someone’s whuffie instantly. Conduct a great symphony? The audience loves you and you accrue whuffie from them all. Shove someone as you walk down the street? That dirty look he threw you now carries a cost. Doctorow imagines that because you achieve whuffie only by the evaluation of others, everyone will be more positively motivated to do useful and creative things to benefit others.
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Both of these fabulist visions find their roots at the real-life intersection of information technology and personal conduct. Reputation in the virtual world, the world of networked communication, can be calculated with exactitude. Computer science engineers rely on reputation systems to mathematically quantify trust in online communities. Everything from web site security to trading communities like eBay employs reputation-based computational models that evaluate behavior, calculate trust scores, and apply them to everything from security access to insurability. As more and more information about who we are and what we’ve done moves from the relatively safe confines of personal connections in semiclosed societies to the far more vast network of the Internet, our personal reputations begin to more closely resemble these abstract commercial ones. As the online world has a persistence of memory with no rival, HOW we do what we do—every day becomes far more important and integral to our ability to thrive.

Online, mathematical reputation systems, in fact, provide us with an interesting way of evaluating the value of reputation in life. Researchers at the University of Michigan and Harvard University conducted a study that aimed to do just that. First, they noted that in living, word-of-mouth reputational systems—the kind that work for or against us in business each day—much information is lost or omitted. Humans, as expressive as we are, are imperfect communication systems (ask anyone who ever played the game of “telephone” as a child). Online systems, like the one used on perhaps the most widely known application, eBay, forget nothing. Buyers and sellers on eBay rate each other with a feedback score and a short written comment. Not only does that score and comment remain forever, millions can access it for next to no expense (reputation on the Internet broadcasts your actions simultaneously to merchants in Beijing and housewives in Sweden).
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To evaluate the precise value of this eBay reputation, the researchers set out to discover just how much a good reputation was worth to sellers in an online marketplace, where the traditional signifiers of a seller’s reputation—the cost and appearance of a facility, longevity in a community, connection to known others—are absent. In cooperation with a known and respected dealer of collectible postcards, they sold identical lots of cards through the dealer’s high-reputation main identity and through other, newly created, identities that had low reputational scores. They found that buyers, on average, were willing to pay 8.1 percent more to a seller with a good reputation than to a seller without one, for identical merchandise.

The presence of positive reputation was directly quantifiable. Like trust, it is a soft thing we take for granted, which the new conditions of the world have suddenly rendered hard. Who among us couldn’t do with an 8 percent raise or an 8 percent premium for whatever we are selling?

REPUTATIONAL CAPITAL

Reputation comes in many forms. It can be, most obviously, the word-of-mouth messages that others receive and pass along about you. It can also be the proxies of your past achievements, like your resume or your past salary. Almost everyone can remember a time when, confronted with the knowledge of what someone they have just met earns or their previous job titles, responded with the thought “Wow, he sure doesn’t seem like a $X per year kind of guy.”

A friend of mine used to produce television commercials, an industry staffed mostly by freelancers paid day rates. As part of any particular job, he would routinely find himself hiring any number of staffers, from entry-level production assistants (PAs) to directors of photography (DPs), who came with a wide range of salary quotes. Staffs would form for short-term, high-budget projects—anywhere from a week to a month and up to a million dollars or more—and then disband again, making the process a sort of high-turnover microcosm of what human resources (HR) professionals go through when staffing longer-term enterprises. In a high-turnover situation like this, reputational capital increases dramatically. No work commitment lasts long, and success depends on sustaining repeat clients, people who hire you again and again.

The past achievements of top-level creative talent like DPs often speak to their artistic reputations (their WHATS); their HOWs—temperaments and personal qualities like grace under pressure, team skills, and communication skills—while important, seldom rise to a level of equal importance. In the creative leadership positions, talent often rules the day. Reputation made the most difference in the lower-skill positions like PAs, the entry-level worker bees critical to the smooth functioning of every film set.

“Breaking into the film industry and developing a freelance career is almost exclusively a reputational, word-of-mouth process. One producer recommends you to another, and they to yet another, in an informal network. Almost no one is hired unless someone vouches for them,” my friend told me. When PAs receive a work call, however, they have another reputational component to manage: their quote, or salary rate. Day rates on film shoots can vary widely depending on budget, type of project, personal experience, and other factors, but PAs can quote any amount (within a range) they desire. “If I had a normal-sized budget, I would always trust the PA to quote me their rate,” he said. “But the rate they quoted set an expectation of performance. If a PA quoted me [the then top day rate of] $200 per day, I expected him or her to show up on set and be really crack: motivated, self-generating, knowledgeable about equipment and procedure, and able to solve a lot of the many problems that plague a shoot on any given day. If they quoted me a lower rate, say, $125, then I would know that this was someone who needed more training. My expectations would be lower.”

When the shoot day began, expectation became everything. “If you came in with a low quote and really performed, I was much more likely to invest time and effort in training and grooming you. I cut you more slack when things went wrong and created more opportunity for challenge when things were slow,” he said “If you had a top quote, however, and you weren’t on your game, the next day you were just gone. Not in a hostile way—you never have to fire anyone working freelance; you just got a warm thank-you, a handshake, and a ‘Sorry, we don’t need as many PAs tomorrow.’ ” (In the fast-paced environment of film production, no team has any allowance for friction or distraction, or anything that slows the process. If you don’t measure up to the expectations set for you by the proximal reputation set by your quote, you are just out of work.)

Although hiring and firing in a corporate environment are usually longer processes than the handshake-and-smile of the film world, increasingly business finds itself unable to carry within it anything that slows down the machine. The bonds between people in common enterprise today are often thinner than before. Consultants, part-timers, freelancers, strategic partners, and all manner of other shorter-term commitments make up the variety of synapses between people in business. The world is mobile and information skills more adaptable and malleable to a wider range of opportunities. In such a world, we are often teamed in work situations where we must be productive with little of the time more traditional, longer-term work relationships have to build trust and continuity. Gaps between what you represent and what you deliver can cause almost instant mistrust, and, in a thin-bond world, end in a friendly handshake. Delivering reputational consonance—giving others the feeling that what you see is what you get—creates quicker acceptance, stronger synapses, and greater opportunity. This, in turn, contributes to your reputational capital by increasing the trust circles around you, and, increasingly, your reputational capital is the coin of the realm that affects your buy-in to the biggest games going.