#AskJPM: Social Engagement Gone Wrong

An Opinion Editorial by Tan Wen Nan

Declaration of Authorship

I hereby certify that the following opinion piece is entirely my own original work
except where otherwise indicated.

I am aware of regulations concerning plagiarism, including regulations

concerning legal actions that may result from plagiarism. Any use of the works of
any other author, in any form, will be properly acknowledged at their point of
use.

This opinion piece was not, and will not be, reproduced in any parts for my
academic work at Singapore Management University and Stockholms Universitet.

Tan Wen Nan

 Riding on the success of social media giant Twitters Initial Public Offering
which investment bank JP Morgan (JPM) was involved in underwriting, a question
& answer (Q&A) session was, quite aptly, organized via that same social media
platform. The general public was encouraged to submit questions through the
hashtag #AskJPM prior to the Q&A session, to which JPM Vice Chairman Jimmy
Lee would attempt to answer the next day.

A similar exercise was also conducted by JPMs competitor Goldman Sachs

(GS) two weeks before with GS Global Head of Financing, Stephen Scherr. In fact,
the GS experience could very well have been more daunting as the entire Q&A
session was filmed and broadcasted live with viewers submitting questions in
real time online.

Considering the parallels between the two entities (both investment

banking industry leaders) and target audience (the curious public), one would
expect that both of these experiences would have largely similar outcomes.
However, the aftermath of the social engagement exercises by the two
investment banking powerhouses could not be any more different.

What was supposed to be an educational and practical exchange on

leadership, career and life took an ugly turn as netizens jumped on the
opportunity to bombard JPM with a deluge of accusatory and taunting tweets.
The exercise became largely unproductive and spiralled so out of control it had
to be shut down.

This negative response is in stark contrast with that experienced by

Goldman Sachs which ended up hosting a highly productive discussion, lasting
more than thirty minutes. Issues discussed included corporate financing and
economic trends in Latin America and that discussion is now proudly archived on
the GS website for future reference.

It is apparent that JPM was beleaguered by its own initiatives while GS

came up victorious. But what is more puzzling is how these two similar exercises
could have ended up with such different results?

Social media has stealthily accumulated a ubiquitous presence in our daily

lives over the years. With its vast outreach and influence, corporations are
flocking to establish their social media presence in an attempt to better engage
their stakeholders. These initiatives quickly multiplied over the years as the
number and scale of social networking platforms rapidly expanded and gained
more users. In this day and age of increasing digitalization, failing to cultivate a
strong social media presence would threaten a brands relevance and serve as a
prelude to its demise.

However, as exemplified by the exercises conducted by Goldman Sachs

and JP Morgan, the outcome of social media engagement can be highly
polarizing. This begets the question of the bane and boon of social media, and
how corporations could effectively leverage on the opportunities presented by

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social media, while avoiding its pitfalls.

Traditional information dissemination methods operated through a one-

way street, where organizations had the power to release announcements after
carefully curating its content, and the target audience had little or no outlet to
publicly respond to the messages.

However, since the advent of social media, information dissemination has

become more interactive, making the communication process a network of many
different nodes with content being generated continuously, and flowing in all
directions. With each node being an effective source of information, the power
and control that was traditionally perched firmly at the tip of the organizational
pyramid dissipates downwards to the individual.

Fundamentally, social media acts as a mobilization tool and aids in the

spreading of information. It demolishes the traditional hierarchy of top-down
information dissemination and shifts the power to the individual. It is also
precisely within these basic characteristics where both the bane and boon of
social media lie.

Each node effectively acts like a pulse, pumping content through the
communication vessels. Information dissemination now operates at much higher
efficiencies and faster speeds, which serves to help corporations broadcast their
intended messages to the targeted demographic more effectively.

However, the heightened speed and interactivity of social media also allow
users to examine and scrutinize the information received, and empowers them to
effortlessly broadcast their opinions to influence the rest of the network. With
this newly gained power, organizations often find themselves at the mercy of
social media users, who now have the ability to smear long established brands,
shake foundations of age old traditions and coalesce hoards of people to stand
behind a cause, all by a few simple clicks or within Twitters 140 character limit.

A historical moment often referenced as the pinnacle of social media

influence on information dissemination is the successful upheaval of the Mubarak
regime during the Egyptian Revolution. While it remains debatable whether
social media, in its singularity, propelled Egypt towards democracy, it is
undeniable that social media played an important role in bringing the revolution
to life. The Facebook group We are Khalid Said was created by activists and
was strategic in connecting domestic and international Egyptian activists, eased
the co-ordination process for protests and established platforms for discussions.

Although strikingly different in severity, intensity and scope, social media

played a similar role in both the #AskJPM saga and the Egyptian Revolution.
Ultimately, social media was key in creating a thick density of connections. It
compounded the dissatisfaction and grievances experienced by the general
populace, boosted collective courage and radicalized a movement to support a

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cause.

Like the Egyptians who felt oppressed and frustrated by the pervasive
corruption and nepotism under the Mubarak regime, the 99% were feeling ever
more indignant by banksterism where the economic system of the world
becomes increasingly scaled towards reaping benefits for financial institutions at
the expense of everyone else. While the disparaging remarks on #AskJPM did not
bring the formidable institution to its knees, it served as a clear and powerful
signal of the disdain the public had for JP Morgan in particular and the financial
industry in general.

One may argue that the backlash received by JP Morgan in its social
engagement exercise was just a case of bad timing. At the time of the social
media disaster, the institution was still plagued with multiple scandals like the
London whale and LIBOR manipulation. It was also held at a time where JPM was
considered Wall Streets worst villain and Main Streets greatest enemy. And
hence, given the general negative sentiments, it seemed perfectly
understandable that JPMs attempt at engaging its stakeholders was faced with
hostility.

Or is it?

The financial crisis of 2008 is still etched clearly in the minds of many, and
with the world still dealing with the consequences today; it is without a doubt
that when it comes to the most loathed bank on Wall Street, Goldman Sachs is a
strong contender, if not the clear winner. Therefore, negative sentiments were
nothing but an excuse to explain the disaster that was JP Morgans social media
engagement exercise. Hence, what precisely is the main difference between the
two exercises?

Goldman Sachs, unlike JP Morgan, carried out its social engagement

exercise in a carefully curated form. Although social media was still used as the
platform for information exchange, the flow of information was mainly tributary.
That is, information was collected from various sources and then funnelled and
filtered through a main node, which was the website where questions were
submitted. From this vast choice of content, conducive questions were selected
and moderated before they were posted to Stephen Scherr.

On the contrary, JP Morgan applied a distributary approach. Information

flowed away from a main source, established new streams in all directions and
anchored its roots all over. As such, the institution had little control and power
over what was being discussed and published, and hence was unable to filter
and curate the selected information that would have encouraged a productive
discussion.

It is important to note that JP Morgan was not alone in this social

engagement catastrophe the past year, British Gas, Tesco, McDonalds and British
Airways were all guilty of using the same social media gun and shooting
themselves in the foot. Like JPM, all the above-mentioned corporations executed

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their social engagement exercises in the distributary fashion via Twitter and
hashtags.

During a time when the publics trust of large corporations remains at an

all-time low, the distributary approach is clearly not the most suitable way
through which social engagement exercises should be carried out. Ultimately
when organizations participate in social media engagement, they are equipping
each user with a magnifying glass. Hence, with the expansion of their social
media presence, a heightened level of transparency automatically ensues.
However, the fact is that large organizations, especially financial institutions,
have safely hidden behind the shroud of secrecy for many years, and would
inevitably crumble under such sudden high levels of scrutiny. While social media
engagement is a good first step towards increased transparency, it is perhaps
still too big a leap forward when carried out in an uncontrolled setting.