In November of 2013, JP Morgan Bank was in a mess and all over the news as it was criminally investigated for manipulating global financial markets. Someone in its marketing team decided to open up JP Morgan for some intended good press––and it went wrong.
The hashtag #AskJPM was created, and the purpose was to have JP Morgan serve as a thought leader for genuine questions from the public. The company had fined nearly $1 billion a couple of months before for its “London Whale” and then reached a $13 billion settlement with the Department of Justice the month before the infamous tweet over bad mortgage loans. JP Morgan was in need of a makeover, but its tweet was tone deaf to the fury that was unleashed against it.
The bank was exposed to a public flogging on social media as consumers took them to task about their questionable business practices. Some of the replies to the JP Morgan tweet included this one, “Did you always want to be part of a vast, corrupt criminal enterprise or did you “break bad”?” and also this one, “When Jamie Dimon eats babies are they served rare? I understand anything above medium-rare is considered gauche.”
Transparency Is Not for Everyone
The reality is that transparency is good for business. But if you’re in a branding mess, controversy or if there have been bad rumors about your business (that could be true), the last thing you want to do is flash a light on your Achilles heel. First, you’ve got to do a lot of thinking about all the benefits and potential liabilities.
In the case of JP Morgan, that tweet opened them up to public scrutiny more than they were already experiencing because it appeared to the public that they were merely glossing over issues that were top of mind for the people. At the moment JP Morgan made the tweet to engage the Twitter audience, there was a lot of public anger at the company.
When Transparency Doesn’t Work
As the story of JP Morgan illustrates, transparency can backfire. But it doesn’t only happen in the middle of a brand crisis. It can happen at other points in business.
- Before the idea is baked. If you’re selling consulting services, for instance, you want to perform at the highest levels, and be useful to your client. However, one of the mistakes around transparency is delivering too soon, before you’ve had the opportunity to develop an idea fully. Sometimes, as much as you would like to provide your client with insight and transparency about the early stages of the work you’re doing, it may be best to wait and deliver the entire menu to them with all of the elements at a later point. If you present a concept that is not entirely fleshed out, they could make decisions based on those early impressions (not having the whole picture), and you’ll quickly return to the drawing board.
- Blaming culture leads to mistrust. In a Harvard Business Review article, about transparency, the authors noted an example of how total transparency can be detrimental. A Dutch supplier of energy was rigorous and transparent about their standards in dealing with toxic waste. One day, the safety office of the company, who had created the rules and criteria was found dead, having violated what he created. The company went on to focus almost exclusively on the fact that he had broken the rules, instead of digging into why or how it could have happened. The rest of the team was left with the impression that the company wanted to blame the victim as opposed to understanding more nuanced details surrounding the situation. Employee morale dipped, and mistrust of the company increased.
- Radical transparency backfires. A couple of years ago, it was reported that radical transparency at Bridgewater, the largest hedge fund in the world, became a severe problem. An employee at the firm filed a complaint with the Connecticut Commission on Human Rights and Opportunities. The employee stated that there was continuous video surveillance, which included the taping 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 the day to day with everything being monitored, including personal cell phones being locked away at the start of each day. The radical transparency––meant to ensure none of their trade secrets got out of the Bridgewater offices––earned it unwanted scrutiny, which impacted the money it was receiving from investors and hurt their bottom line performance.
Business today has to be much more transparent than it was even a generation ago. However, even transparency requires thoughtfulness to ensure that you don’t end up in a situation that serves your brand or business blowback from the public and your customers.
Author of “Not Your Father’s Charity: Grip & Rip Leadership for Social Impact” (Free Digital Download)
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