It seems as if algorithms are taking over the world.
But not so when it comes to reputation and crisis management.
Reputation defies a formulaic approach. Protecting, rebuilding or mitigating risk to reputation -- whether a proactive initiative or one following a crisis -- does not come in a neat, data-driven box, with a clear-cut solution, mapped out for all to see.
Defined as a set of rules for problem solving, algorithms today are everywhere. Just think about the computer programs we use incessantly, the countless apps on our cell phones and mobile devices and the research disciplines that lead to discovery of new medicines. And don't forget those decisions that others try to make for us, such as quickly-posted recommendations by Amazon for our next purchases.
The danger is that talk of algorithms has become so much a part of the vernacular that we fall prey to believing that every problem or situation can be analyzed and then, of course, solved by them.
Even Viktor Mayer-Schonberger and Kenneth Cukier, authors of the celebrated book, Dig Data: A Revolution That Will Transform How We Live, Work and Think, seem to be concerned. On the book's webpage, they caution:
At the same time, there will be an increasing need to stay vigilant so that we don't fall victim to the "dictatorship of data," the idea that we shut off our reasoned judgment and endow in the data-driven decisions more than they deserve.
Ah, yes. With vast amounts of data collected and analyzed every nanosecond, it's no wonder that we now hear the words "dictatorship" and "data" in the very same phrase.
So what's different about reputation? Why not algorithms?
The answer lies in judgment. While of course it needs be empirical -- built on reason, research and experience -- it must also be built with a heavy dose of the intuitive. It is just that appreciation and respect for the unpredictable nature of human beings and their penchant to respond emotionally, not always bound by logic or what has been done in the past, which make the difference. Inherently human, thinking through the what-ifs, especially when circumstances differ, is a distinguishing mark.
In our complex and fast-changing world, these kinds of judgment calls are crucial. Tomorrow's challenges rarely resemble today's, let alone yesterday's. And anticipating how people will react can often be more art than science.
This is serious. To miss the mark in judgment is to jeopardize reputation ... and, in turn, to jeopardize success and risk failure.
For sure, reputation is at the center of long-term success. This applies whether we are talking about a public or private enterprise, a NGO, an educational institute or non-profit foundation.
Few have been greater champions of reputation and the importance of smart judgment than Warren Buffett. Each year, he makes a point of reminding his team. Harking back to the strong language he used in his 1991 internal memo to the staff of Salomon Brothers when he was tapped to bring the disgraced firm back from the brink after its bond scandal, his 2014 year-end note to Berkshire Hathaway senior managers was no exception:
"The top priority -- trumping everything else, including profits -- is that all of us continue to zealously guard Berkshire's reputation. We can't be perfect but we can try to be. As I've said in these memos for more than 25 years: 'We can afford to lose money -- even a lot of money. But we can't afford to lose reputation -- even a shred of reputation.' We must continue to measure every act against not only what is legal but also what we would be happy to have written about on the front page of a national newspaper in an article written by an unfriendly but intelligent reporter."
Doing that, we know, requires judgment.
In an age today where so much is digital, we must, though, give a nod to algorithms, particularly when it comes to online reputation. For too many, there are those embarrassing and pesky online and very public reminders of stupidity and youth: photos, tweets, and other social media postings. Tech gurus who are very adept at moving or removing that damage play an important role for them.
After all, as I write in my book, The Power of Reputation -- just now published in Chinese -- reputation is our most powerful and precious asset.