Does Reputation Matter for a Billionaire?
The saying “money makes the world go round” is arguably one of the truest of adages to have been coined about our current society, and while there are, of course, things that money cannot buy, a solid reputation management strategy is certainly a good investment.
Negative perception is known to have an adverse affect on a person’s business. Especially in our times of “cancel culture” and media sensationalism, an unwanted story can have a direct impact on sales, corporate partnerships, loan applications and investment.
Yet, at a certain point – indeed for a billionaire – does reputation have as much of an impact? Can almost unlimited funds bypass a poor reputation?
The Psychology of Reputation
Humans have quite a complex and complicated way of thinking. Reputation itself is the sum of all of our actions, which is reflected by the people surrounding us. As for people with successful reputations, they tend to stress that building and maintaining it can be a fundamental ingredient of success. Businesses won’t interact with other organizations who have bad reputations and neither will other stakeholders.
When we think about branding, one statement is true. People like people like them. And while we may not all be billionaires – indeed only 0.000035% of the world have the honor of such a title – we may share the same values. Reputation is dramatically affected by the stakeholders with whom we wish to interact. Arguably these are the people we care about impressing or to whom we should show our more favorable side.
Comparison of Reputations
While some successful business people are flippant about public perception, a good example of a billionaire who cares how people see him is Virgin founder, Richard Branson. His public image reflects not only who he is, but the values that drive his company today. Branson is a self-made entrepreneur, an everyman and a likable character who always seems to have a smile on his face.
He comes across as fun loving and fancy-free – an exact replica of who he wants his customer to be, and perhaps his investors. He has constantly maintained that authenticity and reputation are by far the most important drivers for success, and remains a true believer in such values. As a result, his image is spotless.
Conversely, a billionaire with a bad reputation who is still successful is Jeff Bezos, founder of Amazon. Bezos has racked up quite the unpopular external opinion for himself and has done little to remedy the situation. He has been known by some as an aggressive and opportunistic leader who ill-treats employees and encourages distrust in an environment which has been named “notoriously confrontational”.
This however, didn’t seem to affect Amazon revenues overall. So does he care? Arguably not, although since leaving Amazon as CEO, Bezos has made a push to show himself as charitable and philanthropic, committing to donating the majority of his fortune to charity in a Bill Gates-esque manner. So perhaps he’s not so bad after all? If he were uncaring about his reputation, would this announcement need to be made in a large media push?.
Elon Musk and His Twitscapades
Elon Musk is an incredibly popular and wealthy entrepreneur and is among the wealthiest people in the world. In recent months, Musk experienced severe reputational issues, following his recent acquisition of Twitter. He vowed to make improvements to the social media giant, however, looking at the current situation and how the events of this purchase unfolded, this is arguably not the case.
Since finalizing the deal just six months ago, the valuation of the company has dropped from $44 billion down to $20 billion – a huge decrease in stock price and value. Musk has gone on to state that he brought the company back from bankruptcy, which may have been from a large cash input from the initial purchase.
With the transfer of ownership, Musk tore quite a hole into the company, specifically by laying off 80% of the existing staff. Furthermore, he allegedly failed to pay outstanding bills, antagonized journalists and news outlets, and oversaw a few questionable policy changes which threatened to destabilize the company. All of this led to the decrease in transparency for the company and drove away top advertisers that promote their brands using the platform.
Not only did Musk damage loyalty and perception of the brand and its name, he heavily tarnished his own reputation in the process. Ever since his purchase of Twitter, Musk is regularly strewn across headlines globally, especially with his controversial opinions tweeted from his own personal account.
Jack Dorsey Speaks Out
Twitter co-founder, Jack Dorsey, voiced his own opinion on the situation. After the final bid for Twitter, Musk tried to back out of the deal which included a breakup fee of $1 billion should he renege on the deal. However, with Twitter threatening to sue Musk, the South African businessman inevitably completed the purchase. Dorsey shares that Musk should have paid the breakup fee and never made a bid on the company in the first place, making clear that he blames the billionaire for the platform’s downfall .
This reputational issue has caused strife across Musk’s known assets and following this issue, Tesla stock also fell in value and his own personal reputation plummeted even further. It can safely be said that Musk is seen as having quite an unconventional and erratic personality.
Does It Even Matter?
Whether you are a billionaire or not, reputation can still certainly have an impact on the companies with which you are associated. The question is whether it matters significantly enough to the billionaire themselves. Will Twitter recover from Musk’s impactful outbursts? Is this a strategy in itself on a platform known for its so-called ‘toxic’ atmosphere? Is he mirroring how he sees the users to gain support or recognition? Or does he just not really care?
Beloved billionaire, Richard Branson, and Jeff Bezos, one of the most hated, are still both significantly wealthy regardless of their global social perception. Reputation seems to matter for the former and perhaps not so much for the latter, suggesting that it is more of a personal choice than a corporate or fiscal decision.
Of course, when your name is linked to an entire global company that could be affected, lose profits and potentially cause job losses to thousands of people, should you perhaps think of the responsibility you have to your teams around the world? If a billionaire being canceled costs the company millions of dollars in revenue, someone is going to pay somewhere down the line.
For Musk, controversy seems to find its way into his life and statements are made without regard for external perspective.
Of course, being a controversial figure is itself a brand decision. Many thrive on an outward persona of divisiveness. Perhaps he wants to be seen as a troll.
But of course, one person’s social media troll is another’s digital freedom fighter.