Media Minute: Silver linings to a big loss?
May 14th, 2012Media Minute: Silver linings to a big loss?
By Jerry Brown, APR
www.JerryBrownPR.com
Any week when you have to admit losing $2 billion has to be a bad week. Or is it?
Personally, I’d consider a week when I have $2 billion to lose a good week — especially if I still had way more than that left over to play with.
I doubt Jamie Dimon, CEO of JPMorgan Chase, sees it that way. And he’d probably quibble with my use of the word “play” when it comes to describing what I’d do with all that money if I had it. He probably doesn’t want the people who work for him “playing” with his company’s money — although, if you consider gambling a form of play, that’s pretty much what they did with the $2 billion.
Usually when I write about executives or companies communicating during a crisis I’m describing what they did wrong. In Dimon’s case, I want to mention a couple things he’s done right. So far at least, Dimon appears to be handling his company’s big stumble about as well as he could under the circumstances. And, while not insignificant, JP Morgan’s $2 billion loss doesn’t appear to put the company in any real jeopardy.
Remember the three rules of Crisis Management 101: Mess up, fess up, dress up.
The messing up is the easy part, of course. We all do that from time to time. The real challenge is what we do next.
In this case, Dimon fessed up to the loss last week without equivocation: “It was a bad strategy. It was badly executed . . . It was poorly monitored . . . It puts egg on our face and we deserve any criticism we get. So feel free to give it to us, and we’ll probably agree with you.”
And this morning, JP Morgan Chase took a step toward fixing the problem when it announced the departure of its chief investment officer, Ina Drew. I don’t know whether more heads will roll, but I suspect they will.
Dimon himself is probably in some jeopardy, although I suspect his forthright acknowledgment of the company’s mistake and the quick departure of Drew are part of his personal strategy to protect his own job. Whatever the motivation, they’re also good examples of the right way to handle a crisis: Fess up and dress up — and do it quickly.
JP Morgan Chase’s stumble will revive the debate over banking regulation. And it gives ammunition to those who want more regulation, something Dimon has argued against.
While last week’s announcement will likely weaken Dimon’s hand when it comes to opposing more banking regulation, it could very easily strengthen his hand when it comes to exerting more control over what happens within his own company. That’s probably a good thing.
And, if you believe as I do that mistakes are great learning opportunities, then JP Morgan’s $2 billion mistake may prove to be good in the long term for JP Morgan Chase and the industry in which it operates. Only time will tell on that score.
That’s my two cents’ worth. What’s yours?
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