Listen to this article
One of the great myths of business is that your reputation is your most precious asset – and that you can only lose it once.
In truth, throughout my business career I have been meeting buccaneers who have been rehabilitated and are now feted. They might have been personally bankrupt, mismanaged companies or been thrown off boards for scurrilous behaviour. But, provided someone has not been convicted of mass murder, it seems most things are forgivable.
As François de La Rochefoucauld said: “Whatever ignominy or disgrace we have incurred, it is almost always in our power to re-establish our reputation.”
The most straightforward way of repairing your reputation is to become very rich. It is extraordinary how large sums of money bring on bouts of amnesia in the grandest investment bankers who would previously have been the harshest critics.
Success works as a powerful magnet. For example, it was amazing how many supporters came out for Mikhail Khodorkovsky, the billionaire Russian oligarch, when he was prosecuted on charges of fraud and tax evasion. And how many overlooked his behaviour in the late 1990s towards creditors and minority shareholders in his company Yukos? I can recall, too, when Samuel Montagu acted with great enthusiasm for Robert Maxwell in the flotation of Mirror Group Newspapers despite his appalling record and the hints of trouble brewing.
But then none of us is perfect or indeed possesses infallible judgment. Those who take risks are human and will sometimes fail. In fact the most popular speech I have given is a catalogue of my worst mistakes and what I hope I have learnt from them. I delivered it as a contrast to the endless boasting we hear from too many TV-star entrepreneurs. Invariably, those who have stumbled and then recovered are more rounded characters for the experience. But those who have never put a foot wrong, as the American venture capitalist said, are headed for a mighty big fall.
Apart from money, the other cure for “financial difficulties” is time. The merry-go-round of commerce revolves swiftly and, after a few years, most of the faces are new: fund managers, analysts, journalists, bank officers and so on. In bull markets, greed will soon overcome those concerns about a slightly chequered history and, for the right proposition, investors, lenders and cheerleaders will soon be queuing up. Even John Mayo, the ex-finance director of GEC who helped preside over its virtual ruination, has a new career as an activist investor and appears to have backers.
On balance, this endless song of redemption is a good thing. After all, even the original Mr Mars went bust not once but twice before he invented the Mars Bar.
My favourite corporate resurrection is that of William Durant. He was the heroic industrialist who founded General Motors in 1908. He built an automotive empire in just two years through 30 acquisitions. But the manic corporate activity led to losses, and eastern bankers forced him out. So he resigned and founded Chevrolet, which was sufficiently successful that, six years later, he was able to regain control of GM.
He was a rogue who cut corners but he still created in a few years what rapidly became the world’s largest business. If capitalism becomes so bureaucratic that it cannot cope with such freewheeling adventurers, we are all doomed.
Energy, intelligence, good health and an enterprising outlook are more important than an apparently great reputation. I have met a number of renowned figures who come showered with recommendations. All too often they turn out to be disappointments, possessing little desire to work and prove themselves. And I have also met dozens of impressive individuals who had nasty shocks early in their careers – but then recovered the trust of backers and eventually repaid that faith in spades.
I like George Bernard Shaw’s remark: “My reputation grows with every failure.” The vital thing is to keep grafting away, and ignore the critics and brickbats as far as you can. Talent, originality and persistence will normally get you to your preferred destination in the end, whatever the sceptics say.