The Reputation Economy summary

Our digital footprint and digital reputation will become more and more relevant as technology improves. What’s more, the information we share online in the future will go public almost instantaneously.

For example, a surprise compliment from your boss on social media will instantly increase your reputation as a good employee. Accordingly, a grouchy Facebook comment will instantly decrease your score.

Imagine someone has a grudge against you and your small business. What happens if that person starts spreading lies about you all across the internet? Unfortunately, you can’t program a computer to censor such comments. No matter how advanced technology gets, computers will always lack the ability to distinguish fact from fiction.

And so false or inaccurate information about a company can critically damage its reputation. Imagine a competitor leaving fake negative reviews about your company on Yelp, or paying people to create fake accounts from which to write negative comments. By slowly destroying its reputation, they’d sabotage your company, one fake comment at a time.

It’s easy to feel like giving up when your reputation hits a snag. But don’t despair – there’s a way to bounce back. The key is to be proactive.

It’s impossible to change what information is being collected about you, but you can control what information people pay attention to. There are a couple ways of doing it.

In the Reputation Economy, computers are increasingly making important decisions for us – for instance, who to hire or fire. This trend is called “decisions almost made by machine,” or DAMM.

As the term suggests, these decisions are made with minimal human oversight. Consider hiring: Many companies now use computers to screen job applicants. After all, recruiters are slow and expensive; computers, on the other hand, can make thousands of decisions each second, and they don’t need lunch breaks or paychecks.

Hiring valuable talent is a challenge, since there’s no way for companies to know exactly how applicants will perform in a role. After all, the conventional approach to hiring, which relies on gut instinct and resume evaluation, followed by a personality-based interview, simply isn’t that effective.

This was proven by a study that asked a group of MBA students to choose between two candidates on the basis of traditional face-to-face interviews. The results were grim: These well-trained future managers selected the higher-performing candidate a discouraging 56 percent of the time.

Although more and more people are going to college, employers have difficulty finding job applicants with relevant skills and training.

Why the discrepancy? Well, part of the reason students enroll in college is to signal to employers that they’re likely to be high performers.