By Jim Pulcrano
Reputation is owned by the people who gossip about you1.
This disquieting statement is by one of the preeminent researchers in the field of social networking, it leaves us with the impression that we can do little to affect what people say about us. The writer, Dr. Ronald Burt, goes further, stating that the purpose of those gossiping about you is to build relations with one another, which need not be about accuracy so much as empathy (with each other, not you). Faced with a decision about whether to trust you, people turn to trusted contacts, strong ties. Trusted contacts are likely to have similar views of you, so they are likely to report accounts of you consistent with their own views, i.e. if the person talking about you has a negative image of you, the good friend he is talking with is likely to mirror that view, with the goal of strengthening their relationship. The goodness or integrity of your name is not relevant in this social transaction.
Having a good reputation is essential to succeed in business, as it lowers our costs. Customers want to buy from companies with good reputations. Employees want to work for companies that their friends talk about favorably. Suppliers are more likely to offer good terms to firms with stellar reputations. Bankers might even loan money to a company with a great reputation. This applies to all companies, but is accentuated for startups and entrepreneurs who face the liability of newness. Buying from, selling to, working for or loaning money to an unknown and untested company takes courage, and anything that an entrepreneur can do to improve his or her firm’s reputation is worth considering.