I found a great quote from Warren Buffett on the PR blog of Dr. Leslie Gaines-Ross, Weber Shandwick’s Chief Reputation Strategist, and it set me thinking. Does Buffett’s quote contradict my take on Ryanair?
First off, here’s the essence of the message or warning Buffett, according to Gaines-Ross, emails his staff every year:
“We can afford to lose money – even a lot of money. We cannot afford to lose reputation – even a shred of reputation. Let’s be sure that everything we do in business can be reported on the front page of a national newspaper in an article written by an unfriendly but intelligent reporter. In many areas, including acquisitions, Berkshire’s results have benefitted from its reputation, and we don’t want to do anything that in any way can tarnish it. Berkshire is ranked by Fortune as the second-most admired company in the world. It took us 43 years to get there, but we could lose it in 43 minutes.”
My first insight is that quotes don’t speak for themselves because they are open to interpretation. So here’s what I think Buffett is saying.
Buffett seeks a reputation which disciplines his profit-seeking. He seeks a reputation which has the effect of being a proxy for his share value but also imposes a professionally disciplined nuance to his profit-making. The distinction I am drawing is between profiteering and professionalism. Profiteering is the pursuit of profit without discipline (think about the worst excesses of the last boom).
Not all profit is worth having (just as PR agencies like to pick and choose their clients). Not all disciplines are good.
So the point is, has Buffett defined the kind of discipline which usefully mitigates and polices his profit-making? I rather think that the world’s richest man and most successful investor has done so. I’m certain that that clarity is the secret of his success.
In short, I think he has found the right approach to reputation. He knows how to get the right sort of reputation to do the good work only reputation can do, because he knows that reputation is everything.
But, and it is a big one: one only wants to care about being thought well-of by people who matter. That is, preferably by people who matter because they are intelligent, rigorous, involved, serious, as well as valuable. Hence, Buffett in his quote implicitly qualifies his remarks regarding journalists by using the word “intelligent”, as if the vast majority don’t qualify.
I recognise, however, the danger of comparing chalk with cheese. Reputations are multi-faceted, multi-audience constructions, and client-directed in terms of what we want to achieve for them.
So what, I asked myself, do they (Buffett and O’Leary) have in common?
I think the commonality is in the risk factor. Both fear that stupid people, or third parties with competing agendas, could hold the fate of their reputations in their hands.
Ryanair has gone for pre-emptive PR by setting low expectations. While Buffett has gone for the high ground at the other end of the spectrum. Both have sought to make whatever they do consistent, robust and authentic. Hence, worrying about good or bad headlines in the abstract need hardly bother either party at all.
However, both fear losing their reputations, because that is what both companies – like most others – are built and sustained on.
But therein lies a difference. Buffett needs to be thought a good thing by a very few people who can be assumed to be savvy and serious and not likely to be deflected by mob opinion. In a rather small world, it helps Buffett to be thought easy or at least reliable to deal with.
Ryanair needs to appeal to more people, but in slightly different terms. Ryanair know that their customers know that for the most important thing – arriving safely – Ryanair is regulated by regulators not by reputation. Or rather: Ryanair has a reputation for being a loud-mouthed and stroppy player in a highly-regulated environment; while old-fashioned City values of my word is my bond still outweighs regulation in Buffett’s world.
Buffett is in a position at once more robust, nuanced and remote. Buffett’s numbers are kind of obvious, aren’t they? Indeed, it is easier to assess Buffett’s performance than Ryanair’s. But Buffett really might regret acquiring a reputation for being profitable but difficult to deal with. Buffett might find it profitable to have a reputation for being tough but fair. Ryanair, on the other hand, doesn’t mind being thought a pain in the arse, provided the basics are in place.
It is obvious that reputation is what PRs do. It’s important then that when I argue for no-frills reputations, or rock-solid but authentic reputations, I remind you (and myself) that reputations come in all shapes and sizes. You may know that Ryanair’s loud-mouth git PR appeals to a strand of my thinking and prejudices. But so too does Buffett’s low-key persona.