Edition 431 – Reputational Damage

It’s a cool Sunday morning. We’ve ventured to Avoca Beach on the New South Wales Central Coast for a short break and the views from the balcony, of the pounding surf, the Norfolk Island pines and the deep sandstone rich beach are magnificent.

On the recommendation of the agent from whom we’ve leased the property, I head to the local coffee haunt. Here, everyone is out early, along with their dogs. It’s canine central. The various array of designer dogs with “oodle” in their name are joined by Staffys, Boxers, Cavalier King Charles and you name it. It’s a nice place to be.

As I’m finishing my latest book, written by our former Prime Minister, Scott Morrison, I take a moment to reflect on what I’m reading. I’ve been absorbed in the words on the page, and the conversation in the back ground has merely been a hubbub of laughter and chatter.

At some point, I look up and, inadvertently, eavesdrop on a discussion between a couple of middle aged chaps. They’re talking about business. They’re trades based business owners and comparing notes about what’s happening in their worlds right now, where they’re working and the hurdles they’re facing.

One gentleman, in particular, talks about his client who isn’t paying him at the moment. It’s a household name and, somewhat disappointingly for me, it’s a family business that not only do I know of, but I’ve actually seen present a session about their business, and their values, at a Family Business Association event a few years back.

He’s not angry. He speaks in measured tones. It’s a mix of disappointment, frustration and concern.

He’s disappointed they’re taking so long to pay him, given what he’s done for them and the long tenure of the relationship.

He’s frustrated that he can’t seem to get through to the right people, to pay him. No one is returning his calls, or his emails.

More than anything, he’s concerned because, it is starting to put pressure on his cashflow. Pressure he’s not used to and, seemingly, not had to deal with that often in the past.

It would seem this household name has gone through a major IT upgrade of late, changed their accounting systems and, as often seems to happen with these things, it’s gone more than a little pear-shaped. Perhaps no one is being paid, because they can’t find, in their new system, where the invoices are, or how to pay them.

I’ve overhead a conversation about a household name business that isn’t paying its suppliers right now. That conversation took place amongst a group of four others, who also heard that name. In the general vicinity, were around 15 other people. Every single one of us, that inadvertently played witness to this conversation, knows this business’ name and the fact that you can’t leave the front door, without having paid for your purchases on the way out.

Your reputation is everything in business. If you do wrong, word spreads like wildfire. If you’re not paying your suppliers, sooner or later, they will stop working for you. If one of them becomes more than frustrated, they potentially may take matters further. Once the legal wheels start rolling, it’s hard to hold back the momentum.

In business, your reputation is everything. And once it’s gone, it’s pretty much gone forever.

This Week’s Tip

“If you engage in major change in your business, make sure you communicate with all the
key stakeholders of what’s happening, and the likely disruption that might ensue.”