In November 2013, JP Morgan Bank was in hot water and all over the news as it was criminally investigated for manipulating global financial markets. Someone on your marketing team decided to open JP Morgan to get some good publicity, and it backfired.
The tweet read: “What career advice would you ask a leading executive at a global company? Tweet a Q using #AskJPM. On 11/14, a $JPM leader takes over @JPMorgan.”
The #AskJPM hashtag was created, and the purpose was for JP Morgan to serve as a thought leader for genuine questions from the public. The company had been fined almost $1bn a couple of months earlier for its “London Whale” and then reached a $13bn settlement with the Justice Department the month before the infamous tweet about bad home loans. JP Morgan needed a makeover, but his tweet was deaf to the fury unleashed against him.
The bank was exposed to a public flogging on social media when consumers criticized them for their questionable business practices. Some of the responses to JP Morgan’s tweet included this: “Did you always want to be part of a vast corrupt criminal enterprise or did you go bad?” and also this one, “When Jamie Dimon eats babies, are they served rare? I understand that anything above medium rare is considered clumsy.”
Transparency is not for everyone
The reality is that transparency is good for business. But if he’s in a brand mess, controversy, or there have been bad rumors about his business (that could be true), the last thing you want to do is shine a light on his Achilles’ heel. First of all, he should think hard about all the potential benefits and responsibilities.
In the case of JP Morgan, that tweet opened them up to public scrutiny more than they were already experiencing because it seemed to the public that they were simply overlooking the issues that were most important to people. At the time JP Morgan made the tweet to appeal to the Twitter audience, there was a lot of public anger towards the company.
When transparency doesn’t work
As the JP Morgan story illustrates, transparency can backfire. But it doesn’t just happen in the midst of a brand crisis. It can happen at other points in the business.
- Before baking the idea. If you sell consulting services, for example, you want to perform at the highest level and be helpful to your client. However, one of the mistakes related to transparency is delivering too early, before you’ve had a chance to fully develop an idea. Sometimes, as much as you’d like to provide your customer with insight and transparency into the early stages of the work you’re doing, it may be better to wait and hand over the entire menu with all the items at a later time. . If you present a concept that isn’t fully developed, they might make decisions based on those first impressions (without having the full picture), and you’ll quickly be back at the drawing board.
- Blaming the culture leads to mistrust. in a Harvard Business Review article, on transparency, the authors pointed to an example of how total transparency can be detrimental. A Dutch energy provider was rigorous and transparent about its standards for managing toxic waste. One day, the company’s security office, which had created the rules and criteria, was found dead, having violated what he created. The company began to focus almost exclusively on the fact that he had broken the rules, instead of investigating why or how it might have happened. The rest of the team was left with the impression that the company wanted to blame the victim rather than understand the more nuanced details surrounding the situation. Employee morale plummeted and mistrust of the company increased.
- Radical transparency fails. A couple of years ago, it was reported that radical transparency at Bridgewater, the world’s largest hedge fund, had become a serious problem. An employee of the firm filed a complaint with the Connecticut Commission on Human Rights and Opportunity. The employee stated that there was continuous video surveillance, which included the recording of all meetings and security guards patrolling the offices. This had a chilling effect on the company. There were other charges of sexual misconduct and harassment. Bridgewater operated on a day-to-day basis with everything monitored, including personal cell phones that were locked away at the beginning of each day. The radical transparency, meant to ensure that none of its trade secrets left the Bridgewater offices, earned it unwanted scrutiny, hurting the money it was receiving from investors and hurting its bottom line performance.
Business today has to be much more transparent than it was a generation ago. However, even transparency requires consideration to make sure you don’t end up in a situation that favors your brand or your business to the detriment of the public and your customers.