Tiger Woods and The Greatest Risk
Posted by Larry Doyle on December 18, 2009 3:07 PM |
What do the dalliances and sexploits of Tiger Woods have to do with Sense on Cents? Everything.
Uh-oh. Are you thinking, “Don’t tell me, LD, that you are going to turn a staid and fairly conservative business blog into a place for social stargazing and barroom gossip.”
No, don’t worry about that. While there are some obvious personal lessons involved in the Tiger Woods saga, there is a very real business lesson as well. I initially addressed this lesson when writing about Bear Stearns a year ago. My piece, “The Greatest Risk,” addresses reputation. I wrote then:
For those who have read my pieces, you have heard me stress how important it is to understand risk. On Wall Street,as in any business, there are all types of risk. For example, there is market risk, credit risk, interest rate risk, prepayment risk, and counter-party risk amongst others. For anybody involved in the markets, all of these risks are facts of everyday life, but they pale in the face of what many feel is the greatest risk of all, and that is “in never taking risk.” For without risk, there is no reward.
However, in my opinion, there is a greater risk that lurks everyday and for my money is massively mispriced, and that is reputation risk. When I say mispriced, I mean there is no premium high enough to jeopardize one’s personal and professional reputation.
Again, there are many who would say Tiger Woods, or any individual for that matter, is entitled to his personal privacy and should not be publicly judged by his private actions. I would respond that Tiger Woods is not strictly a private person, but he is also very much a public brand, and effectively an industry unto himself. The power of the Tiger brand was enormous. As with any brand, the marquee value is maintained only by continually burnishing and polishing the image.
Say what you want, but the Tiger image is forever changed and with it the Tiger brand. Can Tiger redeem himself? Of course. The power of redemption is a remarkable force. I hope for his personal sake that he addresses his issues and does redeem himself. That said, the Tiger brand is forever changed.
The lesson for all of us, and especially those starting out in the professional world, is one I address with every individual whom I mentor. As I highlight in my Career Planning link here at Sense on Cents:
While I am fully supportive of taking prudent risks in a career, the one risk for which there is no premium high enough is the risk of a tarnished reputation. With word of mouth being the most powerful form of advertisement, you never want to run the risk that your product is viewed as impaired by a questionable reputation.
Tiger Woods’ personal transgressions put his professional brand at this greatest risk. He has lost more than he would have ever imagined.
Tiger is perhaps the greatest golfer to ever play the game. As in any business, though, the risk of jeopardizing one’s reputation goes far beyond any golf course, trading floor, or boardroom.
That is the Tiger lesson for all of us.