Personally I can’t recall so many real-time lessons at such high levels in Public Relations occurring all at once. There are so many I thought I’d share some thoughts and observations.
If there’s anything that companies, governments, executives, and more put on the back burner is exactly what they’ll do when the excrement hits the proverbial fan. They’ll give lip service to it. They’ll have plans locked away in secret locations. But what they won’t do is what they should do; Be honest in what has happened, State contrition, Put plans in place where it should never happen again, and MEAN every word of it!
First let’s look at Mr. Dimon of JPM last appearance before congress. Did anyone notice a subtle yet significant demeanor change in his testimony? If you listened carefully to his opening statements, and the way in which he responded to questions from House members (their finger-pointing was far more directed and stiffer than the Senate) it was obvious that his initial statements to the press left far to many holes that could be exploited later. And they were.
Here’s a few points where Mr. Dimon found himself suddenly uncomfortable in trying to answer questions where his initial words were being used against him, and if he had followed a path similar to what I wrote his response could have been much more direct, short, and where an honest response of “That question has already been addressed.” could be used to brush aside any political grandstanding in his favor.
First: The Hedging Question:
When Mr. Dimon first addressed the issue this point was glossed over by not only himself but nearly everyone in the financial media. Within hours of that talk I wrote the following: “If you can lose on this while at the same time you can lose on that what you did was not a hedge. You speculated, you gambled, you did something, but it clearly was not a hedge.” (Article archived here)
It seems I wasn’t alone. The outspoken Christopher Whalen of Tangent Capital Partners LLC made the same case on Bloomberg. In an interview he said: (I’m paraphrasing) “Was this a hedge? No. If we’re posting reserves against it, it’s not a hedge.”
Second: Mr. Dimon wasn’t aware.
I wrote: “If he didn’t know or fully comprehend the risks he’s either a fool, or has had plausible denial scenarios at the ready on par with any Head of State.”
Mr. Whalen expressed that he to did not feel that Mr. Dimon was unaware and gives his reason why. You can hear the full interview on Bloomberg here.
Third: What about your money and job?
This was bound to be asked, and why this needed to be addressed and taken right off the table because if a scrap was left behind the ability to feed the masses from it would rival any biblical narrative.
I wrote this should be said: “As with everything at JPM the buck stops with me. I have alerted the board of my decisions and asked the board to conduct a full review of the matter. I have also instructed the board that if they find anything improper or a mismanagement on my end that for any reason put JPM at risk or its shareholders I would tender my resignation if they wish.”
When the issue of claw backs and his performance as CEO came up, his response was: (I’m paraphrasing) “I serve and answer to the boards recommendations or wishes.” Although correct it’s far too wishy-washy and doesn’t deliver the kind of directness that a response of: “I’ve made it clear to the board, and in my original statement if they find fault with me then I will also resign if they see fit, all of which is their discretion, including claw backs, not mine.” That would have allowed no scraps to be found with the ability to honestly state you answered an issue forthright and continue to move on. But in not doing so it reeks of hiding behind the legal governance before predators whom want blood, not words for dinner.
When you’re at the helm of not only one of the largest corporations or running a lemonade stand you need to be aware of the maxim: “You’ll never get a second chance to make a first impression.”
It also applies that if you don’t clearly explain your mistakes first, it could result in never getting a second chance to explain.
© 2012 Mark St.Cyr