Why success can kill your reputation

February 22, 2007

In this world we have a love for creating reputations via the media, then destroying them. Pride goeth before the fall, how have the mighty fallen and all that. Witness Microsoft and Wal-Mart. Microsoft’s reputation plummeted as their power grew and the aggressive (hyper aggressive?) business practices that vaulted them to the top of the software business and the business world became the very thing that people hated them for. While bloggers Scoble and Israel in Naked Conversations rightfully claims an important role of blogging for Microsoft’s remarkable reputation recovery (I saw one list that had them as the most respected company in the world) I attributed in this blog more to the fact that people were starting to see that Google was a real competitor and Microsoft had reason to be afraid. We like companies more when they have competition to fear it seems.

Wal-Mart’s business practices did not change when they became top dog in the world of retailing and top in revenues. It was these tough practices that got them there. But once there, the hoots and hollers have never stopped.

Toyota seems to get this. Not sure if that means it is a universal culture thing, or whether they are smart enough to have observed that being number one can take a real toll on an otherwise stellar reputation. This article talks how Toyota is preparing for the day when the media proclaims them king of the US car manufacturing world.

Market leaders, and all those with dominant or monopolistic market positions, take note.

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