What Matters More: Having Confidence, or a Good Reputation?

What makes companies stronger: having confidence, or enjoying a good reputation? A recent study of U.S. company stakeholders drew some interesting conclusions.

Stakeholders — including investors, business-to-business customers, employees and public influencers – were polled on which qualities make them more likely to support a company.

When it comes to what inspires stakeholder behavior, there is a stronger correlation between confidence in a company than there is with a good company reputation, according to the report, from FTI Consulting.

Some of these behaviors include employees’ tendencies to join or stay at a company, customers’ inclination to buy products and services, investors’ predisposition to purchase and hold stock in a firm and policymakers’ and citizens’ willingness to advocate for a company, the firm said.

In other words, a confident company gets better results from its stakeholders than one that works hardest to protect its reputation. In fact, FTI Consulting found that, on average, companies have a 30% better chance of achieving these desired behaviors if stakeholders are confident, than if stakeholders say the company has a good reputation.

What does this mean for society? After all, we’ve seen how over-confidence can cause companies to literally self-destruct (Enron), or to operate recklessly within industries (for-profit financial services circa 2002-2008) – to the point of posing a threat to society.

When we think of companies who have operated in a ways that go against the interests and values of society, we’re reminded of ones who were indeed quite confident, but who placed a lesser value on building a good reputation.

And yet, the stakeholders who matter most to companies seem to value confidence above reputation: they would rather work for, do business with and advocate for confident firms over ones that have a sterling reputation.

After all, confidence is a highly-prized quality in American society. It connotes boldness, competitive fervor and, ultimately, success.

While we, (as a society), sing the praises of companies who work to build a good reputation – for corporate citizenry, progressive worker policies, environmental responsibility, and other qualities – we nonetheless elevate those who exhibit the most confidence. Even ones who demonstrably lack those virtuous qualities we pay lip-service to.

The results of this study are therefore both intriguing, and disturbing.