As the Penn State debacle deepens, I’m reminded of Ben Franklin’s quote that “It takes many good deeds to build a good reputation, and only one bad one to lose it.”
Regardless of who’s right and who’s wrong, or who knew what when, the tragic series of events unfolding in the Pennsylvania hills has the school and individuals working overtime on damage control.
Happy Valley seems more like Death Valley.
What’s the impact of this tragedy?
For Joe Paterno, the allegations have cost him his job and an unceremonious firing. Paterno’s legacy as the winningest football coach at a major American university now will be forever linked to this scandal and speculation that he could’ve done more sooner to prevent the heartbreak. It will cost the ex-coach time and money as he works to proclaim his innocence with the help of a high-profile lawyer.
For Penn State, the scandal has brought embarrassment, distraction and likely will bring lawsuits. It has cost the school football recruits as athletes previously committed as well as those considering Penn State have now said they will take their talents elsewhere.
How many students will have second thoughts about enrolling at Penn State?
How many donors will pull back on their giving?
Ironically, professors from another Pennsylvania school – The Wharton School at the University of Pennsylvania – calculated the cost of a damaged reputation several years ago. The study found that “a 10% change in CEO reputation is estimated to result in a 24% change in a company’s market capitalization.”
Knowing that when reputations fall, fortunes can fall just as swiftly, Warren Buffett once advised his leaders that “we can afford to lose money – even a lot of money. We cannot afford to lose reputation – even a shred of reputation.”
A culture of accountability starts with non-negotiable values that put everyone in the organization on notice that “we do what’s right for our employees, our customers, our suppliers and our investors…even when it’s difficult.”
Or as coach John Wooden reminded his players, “Be more concerned with your character than your reputation, because your character is what you really are, while your reputation is merely what others think you are.”
How’s the character of your organization?
Are your values cheap words or do they reflect how things really get done? ■
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