The butterfly effect: How bad partners crash good reputations

By Steven McCarty

The National Ethics Association


Butterfly wings are fragile, but they can also unleash tornadoes. Similarly, the people you decide to partner with can easily destroy your reputation if you let them.

Reputation is as delicate as a butterfly’s wings. It follows that a small event distantly related to your business can have a huge impact on your reputation. You may recognize this as the “butterfly effect “ — named after the possibility that a butterfly flapping its wings in Belize can generate a tornado in Texas.

Business professionals are always launching their own butterfly effects. They make decisions about what products to sell, which colleagues to affiliate themselves with, what selling systems to use, etc. According to chaos theory, which underlies the butterfly effect, one such decision can produce potentially devastating consequences.

Here are three events relating to advisors hiring lead-generation firms, each with unforeseen negative effects on their reputation:

Case No. 1 — A direct mail firm suggests the end is near for Social Security in a business reply card mailer to the senior market. Butterfly effect: One recipient is actually a retired professor of health care finance. He knows the postcard is fraudulent, but agrees to an appointment to confront the salesperson. He does more than that. He reports the person to the state’s consumer protection agency, which issues sanctions. The action gets posted to the department’s website, picked up by local media, and sent aloft by Google — forever.

Case No.2 — A vendor conducts telemarketing campaigns targeted to non-English speakers. Consumers say “yes” just to get the telemarketer off the phone.

Butterfly effect: A salesperson arrives at the appointment to find an elderly, non-English speaking Hispanic women who has early-stage dementia. The woman becomes anxious about the unknown visitor, calls her son, who summons the police. The police arrive to investigate and the agent’s name gets mentioned at the station, triggering a damaging rumor in his close-knit community.

Case No. 3 — An Internet firm sells leads generated by another lead generator.

Butterfly effect: The first lead firm collects confidential information from the consumer, then sends the lead to a second firm, who sells the lead to a salesperson. Now the sale is potentially non-compliant because the salesperson got the lead from a firm that wasn’t technically authorized to have the client’s personal information. Is this a lawsuit in the offing?

Here’s my point. Butterfly wings are fragile, but they can also unleash tornadoes. Similarly, the people you decide to partner with can easily destroy your reputation if you let them. How to prevent this?

  • Only affiliate yourself with partners who share your ethical values. Your reputation is only as good as the reputation of everyone you work with.
  • Do your due diligence before you decide on a partner. Never take verbal promises on faith.
  • Use the power of the Internet to check out potential partners before you do business.
In short, be protective of your fragile business reputation. Yes, with the right products and sales skills, it’s not hard to fly high. But one flap of a butterfly’s wings can bring you down fast.