In economic transactions, and especially in organizational settings, reputation is a very important concern. This is especially true when considering transactions that can unfold over a long duration of time, leading to an uncertain outcome in the future. Recalling our earlier class discussions of the principal-agent model, asymmetric information, and organizational politics, it is clear that how economic agents perceive one another has a tangible affect on the result of their interactions. One's reputation can be either serve as a powerful tool in exercising organizational influence, or it can be a hindering scar that closes doors.
Instead of using an example from my own experience, I want to share what I was told by a University of Illinois Economics Alumni whom I interviewed a couple months ago. This alum graduated with a bachelor's degree in economics in 1998. After working as a proprietary options trader for Bank of America in the 90's and 2000's, the economic crisis of 2008 prompted his return to school in order to earn an MBA and ultimately transitioning him to being a private financial consultant for Fifth-Tird bank. The interview was conducted for a career preparation course, and my questions reflected that end. I asked about how his education translated into working skills, and I asked what he would say if he had the chance to share his wisdom with his younger self from decades ago. Much of the advice he offered was fairly straightforward and didn't differ much from what any career counselor would say, but something that really impacted me was how much emphasis he put on maintaining a strong reputation and continuous networking efforts. He told me that the "traditional" career path and retirement plan are obsolete for today's economy. He stated, "Most people can't do that anymore - finish college, find a job with a stable company, and work up that company until they can retire on the the three-legged stool of a pension, social security, and mortgage equity." Instead, he adamantly informed me that nowadays people bounce around, and that they must be mobile in order to keep their career going. For this reason, he found that the single most valuable gem of advice he had been able to crystalize throughout the progression of his career was reputation. "HR people speak a whole different language, but always stay networking. Work hard to earn the trust of your managers, coworkers, and clients, and make sure to always maintain your professional reputation."
This alumni, whose career path is not entirely dissimilar from my desired path, really shocked me. Of all the things he could have told me and throughout our discussions of economics, Illinois, and potential careers for economics majors, the core lesson he wanted to convey was about something that seemed so benign. I have yet to work in a professional setting in which my reputation could mean the difference between success and failure, support and rejection. However, it is clear that one's reputation has a lot more power than I had previously thought.
That was an interesting story. Of course, there is a lot of advice out there about maintaining a good people network. It is necessary not just for a finding a new job, but also for doing work well in the old job.
ReplyDeleteThe issue is how does one build a strong reputation with people when networking with them. What type of interactions help? Out there in the real world, I'm not sure. But on campus, I think it is necessary to do a lot of schmoozing - over coffee or a meal - and do it not just for the down the road value but because it is engaging in itself. I liked that part of the work I did. I believe the people I interacted with largely liked have conversations with me.
And here I really think a lot of it has to be face to face. Electronic communication can then complement the face to face, but my sense is that only electronic communication will not do.
Although this alumnus framed his advice in terms of job-hopping, I can certainly see how reputation maintenance is also extremely important when staying within a company, if not even more so since leaving one company could in effect distort or even erase prior reputations. When seeking to stay with a company for the long-run, I could see one's reputation following them through their entire career among past coworkers, managers, and subordinates.
ReplyDeleteAs I stated in the original post, I have not yet had a professional work experience in which my reputation was on the line. However, I can imagine that a fair amount of schmoozing happens in the private sector as well. Whether its sending christmas cards and gifts to bosses, participating in recreational activities with coworkers, or going out to lunch with acquaintances in the company, engaging in these networking and relationship-building activities is necessary to maintain a positive place within a company's social structure. Although my interviewee alluded to this more personal aspect of reputation management, he seemed more focussed on one's work-specific reputation in terms of expectations, work ethic, and prior successes or failures. In short, if you lose people a whole bunch of money or fail to deliver what you promised, they most likely will not want to work with you again in the future.
These two areas of reputation management, although ideally in separate spheres, are not perfectly exclusive and I would expect some overlap between social and professional interactions. Regardless, I would agree with your point about face-to-face communication. Electronic or written communications certainly have their place within organizations, but they can be restrictive in terms of information richness and the ability to reach a common understanding between individuals or groups. That being said, I find that in today's working world one's digital reputation can be highly impactful on one's career. Whether you make less than tasteful remarks on social media or show a lack of responsiveness over email, one's perceived actions (or lack thereof) can fall lead to negative interpretations resulting from a lack of information richness - it's a lot easier to gauge how somebody truly feels about a topic face-to-face than reading a tweet, for example, and such interpretations can get out of control.