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Jeff Altheide, the vice president of a public relations agency, once told the story of being introduced to a business executive and telling the executive, “Your reputation precedes you.” The businessman, gratified and grinning broadly, inflated his chest and replied, “Thank you!” There was just one problem—the reputation that preceded him wasn't a good one.

When it comes to building a leadership reputation, there are at least two schools of thought. Some leaders see reputation as superficial, subject to distortion, and therefore unimportant. We subscribe to another view: In business, as in life, there is benefit in knowing how other people view ...

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