How can you build a reputation that helps you win support for your ideas? Although we all assume we understand the idea of reputation, did you know there are actually three dimensions, or levels, of reputation?
The first level is simply general reputation, or being known, which represents the level of awareness that someone (or something like an organization or product) has developed within a community. For example, consider whether you are known in your organization or community. Even just being known has benefits, many of which we don’t fully appreciate.
For example, just being known can lead to a mere-exposure effect: the psychological phenomenon wherein people develop a preference for something merely because it is familiar. For example, in one study, four people with similar appearance visited a college course with differing frequency (one person visited five times, another ten, another fifteen, and the fourth didn’t attend). At the end of the course, although the visitors had had no interaction with the actual students when the students were shown photos of the visitors, they rated the people who visited the class fifteen times as much more attractive than those who visited less. In other words, without realizing it, we prefer things that we have merely been exposed to. So if you can just get people to become familiar with you and know who you are, then you increase the odds that they will think positively of you.
The second reputation level is general favorability, or being seen in a positive (or negative) light. For example, we’ve all heard comments like “I’ve heard Sarah is really great” or “I’m glad Anup is on the team.” Although Sarah and Anup may not be known for anything in particular, these favorable impressions have a more beneficial effect than does just being known. And of course, the impression can be unfavorable as well. For example, you may have no firsthand experience with Kmart, but when you hear the name, you are likely to have an unfavorable impression because of what you’ve heard or read.
The third level of reputation is being known for a specific attribute, like innovation, execution, quality, or integrity. This is the most difficult type of reputation for you to develop, but it is also the most valuable. If someone has a problem that requires innovation, execution, or integrity (or some other attribute), the person will naturally look to you. A reputation for innovation is particularly valuable because it helps supporters reduce the inherent uncertainty they feel when taking a risk. As proof, consider the findings of a study conducted by Harvard professor Joseph Bower to understand what factors were most important for obtaining funding for a new project inside established companies. Surprisingly, Bower found that leaders did not choose projects according to whether the projects addressed the biggest market opportunity. Nor did they base their decisions on the highest projected internal rate of return or net present value. Instead, leaders chose projects primarily because of the track record and reputation of the person leading the project.
Reputation has a similar impact when you are seeking funding for a startup. When weighing the benefits of who you know versus what you have done, research suggests that although knowing the right people may help you make initial contact with investors, your reputation has a much greater weight on how likely your project is to be funded.
Reputation has a similar impact when you are seeking funding for a startup. When weighing the benefits of who you know versus what you have done, research suggests that although knowing the right people may help you make initial contact with investors, your reputation has a much greater weight on how likely your project is to be funded.
As Adobe CEO Shantanu Narayen puts it: “If you look at Sandhill Road [in Silicon Valley] and the venture capital community they look more for the entrepreneur than the ideas, because ideas morph . . . but the entrepreneur is the critical person.” This same principle is known among venture capitalists as betting on the jockey (the entrepreneur) and not the horse (the opportunity). Why would investors prefer to bet on the innovator than on the opportunity? Although a venture might have great financial projections, the reality is almost always different than what is expected, so innovators need to pivot and adapt to the unexpected. Experienced investors almost always prefer to bet on an entrepreneur with a reputation for being able to navigate the twisted path to success.
As it turns out, reputation for innovation also matters for public (and private) companies, not just private individuals. Our research on the S&P 500 showed that companies in the top 10 percent in terms of their reputation for innovation had three times higher market capitalization than did firms in the bottom 50 percent of innovation reputation. Moreover, the value of a reputation for innovation persisted even after we controlled for a firm’s general reputation, general favorability, and actual innovation capabilities. A reputation for innovation was more valuable than other reputations we tested, such as a reputation for efficiency, execution, or quality. Remarkably, then, a reputation for innovation is valuable in and of itself—beyond a company’s or person’s actual innovation capabilities. A reputation for innovation will help you win support to pursue new ideas.
