On May 10, JPMorgan Chase & Co. announced it had suffered a $2 billion loss (soon estimated at upwards of $3 billion) in a six-week period by its London-based chief investment office. The firm’s public relations department got busier than usual — which means it was probably pretty close to spontaneously combusting.
But unlike JPM’s PR counterparts at Goldman Sachs, who were recently caught flatfooted by the media firestorm resulting from a New York Times’ op-ed written by disgruntled former advisor Greg Smith, this was a carefully coordinated increase in activity.
Following the announcement by JPMorgan, media outlets scrambled to first understand the news, then explain it to their readers. Words like “egregious,” “sloppiness,” and “stupid” were used to describe the loss. But it wasn’t the media assigning these labels to the situation — it was Jamie Dimon, JPMorgan’s chairman and CEO. See: The Grossian formula for PR: Why Bill’s press is good press, even when it’s bad.
$3-billion tick bite?
In an impressive display of proactive PR, JPM identified a disastrous publicity problem before the media caught wind of it. Dimon, its spokesperson-in-chief, recognized the importance of mitigating the reputational risk to his company by going on an aggressive media blitz.
It worked. The initial furor lasted a little less than a week, peaking with the dismissal of former chief investment officer Ina Drew, and then receding into the background as more recent stories, such as Facebook’s IPO dud, took center stage. Yesterday the shares (NYSE: JPM) were among the leading percentage gainers on Wall Street, rising $1.50 or 4.61% to $34.01.
And even Drew’s resignation is being carefully managed. On Monday, The New York Times ran an article highlighting her recent battle with Lyme disease, citing it as a contributing factor to the discord that gripped the investment management team. The company had been careful to flag — it seems to me — that Drew had been hamstrung by the debilitating illness. Dr. Robert Lahita (yes, he’s related), whom I consulted about the severity of the illness, confirmed that it would indeed be possible for Lyme disease to significantly impair one’s ability to function effectively in a corporate environment. If it was a factor, he commented wryly, it could go down in the annals of finance as the most expensive tick bite in history.
The regulators will now have a look, and perhaps find some errors in judgment and oversight — but Dimon has already called the company out for this. In his “Meet the Press” interview on May 13, Dimon indicated that he fully expected the investigators to delve into the losses, because, as he put it, “that’s their job.” See: Schwab’s rapid response to letter snafu seems to be smoothing ruffled feathers.
Dimon and JPM’s communications team contained the crisis by engaging in some skillful PR chess playing, and in my opinion, stayed one move ahead of the story the entire time. And although what exactly happened is still less than crystal clear, what is clear is that the appearance of transparency and accountability is clearly and pointedly being presented to the public every step of the way via a well-oiled PR machine.
I’ve maintained the view in previous columns that PR is really “credibility marketing.” In other words, you have a message to put out to the marketplace and that message needs to be targeted, candid and true to who you are. You need to be proactive in pushing out this message. You must make yourself available when sought out for comment. Credibility marketing is the cornerstone of your overall marketing strategy, and a vital one, because nothing is more important than how you are perceived by current and prospective clients.
Up until May 10, JPMorgan was the largest U.S. bank left with a relatively untarnished image in the wake of the 2008 financial crisis. Its reputation was on very solid ground. So solid, in fact, that as soon as news of the loss broke, the immediate reaction, reflected in trading activity, was a renewed loss in confidence, briefly, in all major U.S. bank stocks. If these guys could lose $2 billion, who couldn’t lose it — and potentially billions more? JPM, acutely aware of how it was regarded favorably in the public eye, needed to act swiftly and decisively to guard their credibility. And it did a very good job.
So what is the lesson for RIAs? JPM has an internal communications unit and works with multiple external agencies. You will never have the need for that kind of massive PR machine. But here is what RIAs can learn from this financial giant’s PR best practices.
1. Send consistent bedrock messages
JPM in this instance was engaged in “crisis communications,” a special form of PR. But you need not wait for a crisis before getting proactive. If you don’t always have three key messages that you would be excited to discuss with a journalist if given the opportunity — you should. Key messaging gives you a staging area for all of your external communications. If a crisis should ever rear its ugly head, you will feel more calm knowing that regardless of the turmoil surrounding a particular situation, your messaging is solid and consistent. See: Your public relations horror story: It’s not as grim as you think.
Outside of crisis-mode, it is excellent for your overall media profile. In this crisis, JPM took the opportunity to remind people that although it was fallible, it was aggressively taking corrective action and seeing to it that it would keep improving because of the incident. This helped calm the jitters running through the market following the announcement. Its key message seems to have been that 1) JPM seeks continuous improvement and 2) that the good guys in finance try to do the right thing, always.
2. Build up your key spokespeople’s reputations with the media
Jamie Dimon has his share of detractors, but they are outshouted by those who hold him in high esteem. Dimon makes himself available for interviews and understands that, fundamentally, you must be candid, opinionated and accessible. I know one of JPM’s PR people and she is a true professional, balancing a well thought-out and engaging PR strategy with a courteous and respectful approach to working with the media. (I did, however, get a brief taste of journalistic frustration when she declined to be interviewed for this article, saying that she felt she was too close to the story to be objective.)
3. Build a positive profile fortress, and guard it well
In executing your public relations strategy, it’s important to see the forest for the trees. Every article you write and contribute, every tweet, every interview, every quote, every video, slideshow, blog, broadcast appearance — taken by themselves — will cause varying levels of fleeting euphoria. But taken together, you will amass a media profile that will deliver sustained long-term benefits. It all counts. JPM’s years of proactive, professional media interaction provided a shield of sorts, from behind which it was able to prepare and execute a precise PR push when it was needed most.
PR is a long-term endeavor. Treat every media opportunity — both positive and negative — as a building block. If you stick with it, and take the time to cultivate the short-term opportunities to be seen and heard while maintaining the long-term view on the benefits of a solid profile, you will absolutely see the return on investment.
See: Advisors should go all-in to make PR worthwhile — otherwise, steer clear.
Jason Lahita is the Managing Partner at FiComm Partners, LLC, a specialist communications firm that works with advisers and advisory oriented B2B firms to raise their profile, put forth their messages and market their hard-fought credibility. www.ficommpartners.com