The collapse of Dick Smith Electronics, after several decades with a good reputation, is devastating for those who have invested in the business since it floated on the stock exchange. It is sad to see this name associated with what appears to be very unethical behaviour. This story highlights the value of establishing a good name, as Dick Smith did. The alleged behaviour of the private equity firm that floated Dick Smith Electronics destroyed the company’s reputation. A good reputation is paramount for growing a sustainable business.
The hard earned reputation of a business can be seriously damaged faster than it took to grow. The poor conduct of a number of the financial planning staff of some of our major banks clearly demonstrates this. Wrong staff, or staff that do not embrace the values of the business, are a major way that a reputation is undermined.
What builds a strong reputation? A good reputation is built when you know your customers trust you. Trust is built by consistently, day in and day out, doing what you say you will do. It comes from delivering a consistent product or service that the customer can rely upon.
A good reputation comes from having a clear set of core values that guide your decision making, employment decisions, and the way you conduct business. Core values are a handful of guiding principles you strongly believe in and practice. For example, one of our core values is “communication”. We have this is as a core value because we believe in its importance and it is something that builds trust with staff and clients.
Failing to keep good communication up to our staff and customers allows for misunderstanding to arise and our intentions to be questioned. Maintaining good communication with staff and customers prevents misunderstanding and increases confidence in your business. A strong reputation is grown over time.
When a business succeeds there is the real danger of becoming complacent. Complacency is the enemy to a good reputation. When a business stops caring about its customers, and its focus shifts away from the core business, the reputation is damaged.
In the process of building a strong reputation you are building a healthy organisation. The potential benefits of this are high morale, high productivity, low staff turnover, minimal internal politics, and minimal confusion.
How do you rate your reputation in the marketplace? Ask yourself these three questions:
- Do your customers trust your business?
- Do you have a clear set of core values?
- How well do your staff embrace those values and enhance your reputation?
In our highly computerised world it is easy for our businesses to become impersonal and we forget the importance of building a strong reputation. Reputation matters, especially in regional cities and towns. We ignore it at our peril.
Peter Ambrosiussen is a partner at Ambrosiussen Accountants and Advisors, and a Gazelle’s International coach, in these principles www.ambrosiussen.com.au.