Is Reputation a Core Competency?

This is a question I've been pondering for a long time and was reminded by a student's inquiry with regard to an exam question. The exam question discussed a variety of potential core competencies that may include, but are not limited to: lead time, on-time delivery, quality, technical competence, customer service, location, e-tailing, social media, product variety, order quantity flexibility, financial position, workforce stability, and price. My suggestion has long been that firms can't be all things to all people and must prioritize what factors are important to compete in their environment, the market niche they have carved out. My friends in operations management recognize these as order winners, order qualifiers and non-issues. Where does reputation fit into this... is it a core competency or is it based on the firm's performance in the critical areas above?

I recall comments from associates in the past that reputation is the sum of the performance on core competencies, and one opinion offered that reputation is not the SUM but in fact the PRODUCT of the performance in other areas. The recent comment by a student suggested that if you do well on your competitive priorities you will by necessity have a good reputation; conversely if you fail you would definitely have a bad reputation.

I countered with examples that illustrate this is not only the case. If you are labeled in the USA as "big tobacco", "big pharm", "big bank", "big oil", etc. your reputation will be crucified without regard to whether customers love your products. Ironically, the term "big" implies your business is successful and customers are voting with their wallets for your products, and that is somehow used as a criticism. I reckon the same may apply to law firms, cable services and airlines, you will be the target of daggers. It comes with the job.

On the flip side there are times when reputations survive even when performance is dismal. Loyalty to sports teams makes for a great example, and as a New York Mets fan I know this all too well. What on God's green Earth keeps me coming back for more punishment... am I a masochist? Look to Hollywood, where formerly Oscar-winning actors continue to rake in millions based on past performance in spite of repeated crappy performances. I'm amazed as to how the Robert De Niro of Taxi, Deer Hunter and Raging Bull can prostitute himself (hey, got to make a living) by appearing in such drivel as "The Fockers" series, "Hide & Seek", "The Adventures of Rocky & Bullwinkle" and other cinematic gems (note: sarcasm). A final example, and perhaps timeliest, is how voters can have blind loyalty to a politician or political party when there exists no tangible record of positive results, or even as things get worse under that party's rule. A court in Michigan recently ruled to overturn a law to end "straight party voting", which means we have people who walk into a voting booth and blindly select an entire slate from one party, without regard to any individual candidates' policies or platforms. Think of Marion Barry, former mayor and councilman in Washington DC, who was arrested multiple times for cocaine possession, tax evasion, traffic violations and other offenses... yet kept getting re-elected, even as Washington held the title of "Murder Capital of the USA." Priceless Quote #1 from Barry: "Outside of the killings, Washington has one of the lowest crime rates in the country." Priceless Quote #2 from Joseph de Maistre: "In a democracy people get the leaders they deserve."

How does this happen? BRANDING! In the former case of companies or industries that have been indicted by the media, politicians or public-at-large, it is nearly a literal branding like cattle suffer (or those cowboys in the new series Yellowstone; have to plug in the occasional pop reference). These companies let, or failed to stop someone else from imposing a brand reputation on them, defining who they are. In the latter case of blind loyalty, it's where someone or some firm has established their brand and they define themselves. I've read cynical arguments that branding is becoming very popular because it's a way to get lifelong loyal customers without delivering a quality product, which can be so much inconvenient work. I can't say that I totally disagree with that point of view... if my products are great, why do I need branding? Just my thoughts and love to hear comments.

Have a blessed weekend, Ford.