Money Matters

Return on reputation

Money Matters
By Sirajuddin Aziz
Mon, 07, 21

Reputation is a non-quantifiable trait, it is more abstract then exact. It however has intrinsic strength to stand out on its own. It is never latent, it is continuously active. No other intangible asset is at greater risk than reputational risk. It is as delicate as Bohemian crystal and as transparent as clean still waters. Reputation, therefore requires fortification with every single thought, action and deed. Any wavering can be regretfully very costly. An asset that can only appreciate; it shouldn’t ever depreciate.

Return on reputation

Reputation is a non-quantifiable trait, it is more abstract then exact. It however has intrinsic strength to stand out on its own. It is never latent, it is continuously active. No other intangible asset is at greater risk than reputational risk. It is as delicate as Bohemian crystal and as transparent as clean still waters. Reputation, therefore requires fortification with every single thought, action and deed. Any wavering can be regretfully very costly. An asset that can only appreciate; it shouldn’t ever depreciate.

Character is a constitution, a disposition, temperament and psyche of an individual; reputation is about having a good name, standing, stature and firmness of purpose and a resolve of convictions, developed over a period of time. Both, character and reputation have to reside permanently in the positive zone. Their respective boundaries must not only be defined by leaders and managers, but they ought to ensure, that these are neither breached nor transgressed ever.

Is there any critical difference between character and reputation? Indeed yes, there are; but even the differences are complementary and supplementary to the two traits. The differences coexist to strengthen, the concepts mutually and exclusively.

“Character is like a tree and reputation is like a shadow. The shadow is what we think of it; the tree is the real thing” (Abraham Lincoln). Reputation is how others see us; character is how we see and think of ourselves.

The root(character) of the tree(reputation) has to be strong and solid; unwavering in its resoluteness towards remaining on the just side of the fence that divides truth from falsehood. Nobody with a bad character can fake a good reputation.

Can reputation, as an intangible asset, be part of inheritance or is it obtainable? Parentage of recognised repute can always prove to be handy to stand out as a person of repute. This however has limitations of time and on going behavior; if the present and current attitude and conduct, is not in conformity of reputation inherited, then it surely will pass into oblivion. In short, even noble parentage cannot bequeath reputation, and if does, it cannot have sustainability, unless it is backed by personal effort and thought process to strengthen it, continually and consciously.

Reputation is a fore-runner to our recognition in a group, society or even nation. Repetition can grow and be strengthened with focus. In Fact reputation starts to emerge, in the most formative years when one is at school, college or university. We hear at school comments like 'naughty child', 'mischievous', 'non-serious', 'talkative' etc; these are mostly the non-virtuous describing the reason for acquiring that kind of reputation. The virtuous ones are hardworking, deligent, honest, truthful, etc. So, it is essentially at a very young age, we all begin to acquire and build some form of reputation.

Reputation is the consequence of behavior and everyday conduct and therefore it can undergo transformation, for better or for worse. In the development of reputation, great care and effort has to be exercised, for prevention of any act, that may indiscriminately damage or deflate the balloon of recognition. It is true that reputation does not come on a platter. It requires effort and a continuous and rigorous cultivation admist everyday behavior and responses to people and situations.

Can reputation, once acquired be destroyed? How does one protect once’s reputation? These questions naggingly require to be answered to ownself. Firstly it has to be seriously composed and thence it must be protected at all costs.

Any thought and deed that are contrary to the known reputation, will damage it and most often, irrevocably. Even the smallest and slightest deviations can prove to be very costly.

Loss of reputation can hardly be recovered. The damage is irreversible, even if false accusations are hurled at the noblest of the noble; they leave a lurking doubt in the minds of people, especially those who may not be directly connected with the victim of the allegation. Then of course, there is the presence of cynics around us, who would never allow doubt to die, or wither; instead they water and nurture it for more broadcast and publication. Politicians, specially ours, are free of any guilt of having a negative and despicable repute.

They are too thick skinned. Corporate life does not permit such luxuries. Damage to a professional repute is fatal, regardless of a profession. In death, only our physical self is interred, never the reputation; it has life beyond our physical presence. Hence, reputation is eternal.

Reputation sustains itself, no oath is required for its establishment, while all other personnel endowments are prone to be of no use, avail or long lasting, they fade away.

Reputation is a constant companion and co- traveller in the journey of life. Superior intelligence, knowledge, talent, skill, discipline and ingenuity can substitute for resources, but lack of reputation cannot be plugged by any other trait. Intellect, philosophy, brilliance or expertise ultimately remains subservient to reputation.

It is not with great events or issues that a reputation is tested; it is always the small and insignificant issues that truly demonstrate reputation. Since most bigger issues are under focus and spotlight, there can be an unnatural effort to portray a false sense of having good reputation. Whilst the small events in life, that remain obscure from scrutiny, it is the handling of these that brings to fore the quality of reputation and character. Challenges on the operating level do not contribute towards building of reputation, the manner of resolution merely reveals the supervisors reputation. Only difficult times test a person's character. Events mustn't be the reason for acquiring of reputation, it should be the reverse thereof always.

Any leader/manager who lacks positive reputation would induce followers indignation and repulsion. Reputation is about its inelasticity and not about its malleability. Rigidity is its strongest root. If and when faced with a choice to exercise, a good leader would compromise on strategy, but never on character or reputation.

Should Return on Reputation (ROR) be measured or assessed like we do for Return on Investment (ROI), Return on Assets (ROA) and Return on Equity (ROE) --- indeed, I believe it should be evaluated.

The difficulty is that while all other returns have a numeric attached to its calculation, the ROR cannot be reduced to a mathematical equation. In view of its abstract nature, who should do the assessment? The rating agencies, supervisor, managers? Nay, none of them. The first and possibly the most important level of assessment is done by the self - the person.

A collective high rank on the chart of reputation goes towards giving the organization a recognition of repute.

Reputation may not be measurable in exactitude, but is one single most important ingredient to seek the best ROA, ROI and ROE, both in the short and the long term. From the pages of history of religious thought and significantly from the life of our beloved and noble Prophet (PBUH), there are so there are so many lessons to be learnt for acquiring, grooming and maintaining a reputation of distinct and unique recognition.

The author is a senior banker and freelance columnist