“So she sat on with closed eyes, and half believed herself in Wonderland, though she knew she had but to open them again, and all would change to dull reality.”
? Lewis Carroll, Alice's Adventures in Wonderland & Through the Looking-Glass
Ask any financial professional to identify one date this century that will forever live in corporate infamy and odds are the answer is likely to be September 15, 2008. For on that darkest of days, Lehman Brothers proved that nothing was too big to fail and in so doing came perilously close to spawning a global economic apocalypse.
Determining who's to blame for letting the company fail, and who's at fault for precipitating the collapse, is best left to others; heaven knows there's no shortage of contenders.
More to the point, however, is what lessons, if any, we've learned in the past five years and what, if anything, has changed in the way the financial world and its leaders now conduct themselves. But first, a digression.
In a career that's thankfully been anything but dull, one of the business events that remains indelibly etched in my memory is Lehman's painful slide from Wall Street darling to storied occupant in America's corporate graveyard. My memories of Lehman's demise were painfully personal. The bank was a significant client of my former firm, and while we represented the asset management side of the bank, not the corporate entity, the impending bankruptcy promised to blanket every division with the ultimate equality of death.
And so, our communications role having come to a sudden end, we joined the rest of the world on the sidelines watching the bank make one last, futile attempt to avoid the inevitable before submitting itself to the humiliation of bankruptcy.
Fast forward to this week's anniversary of Lehman's collapse and the question lingers: has Wall Street and its stewards made any progress towards redemption in the past five years?
One of the most promising signs of progress, perhaps, may be the willingness of banks and other large financial institutions to be a little more open to two-way communication with the media. Even Goldman's Lloyd Blankfein, he of “God's work,” and JPMorgan's Jamie Dimon, still chafing from shareholder attempts to divest him of his chairman's title and public outrage at his “Tempest in a Teapot” remark, have made themselves a touch more accessible, even to some of their harshest media critics.
What Blankfein and Dimon understand perfectly well is that attempting to communicate one's way out of reputational quicksand is folly. Regaining trust after the largest economic disaster since the Great Depression requires voluntary behavioral change, a process that begins with fair and open communications, so at least that was a step in the right direction.
Truth be told, financial institutions have made constructive changes in the past five years, mostly because new regulation mandated it, but we'll take what we can get.
Many financial firms, having seen firsthand how quickly reputation, loyalty, and profits can vaporize, are beginning to appreciate the power of public perception. The arrogance with which we're well familiar hasn't gone, but the savviest leaders among the more progressive firms recognize that their brand has tangible book value that can be lost quicker than it takes to say “SEC examiner on line two.”
Five years of behavioral changes aside, public trust in financial services is still a basement dweller and the free pass media gave to Wall Street pre-2008 belonged to an era that will likely never return. Consumers and company shareholders who once kept misgivings to themselves are way more vocal with their concerns and social media platforms have greatly amplified their voices.
New financial misconduct continues to take down powerful, even admired, brands, albeit more slowly than in the past. Suffice it to say, it's not that there's been a recrudescence in unscrupulous corporate behavior, I'd argue it never really ended.
And, as many media outlets have pointed out, no major Wall Street figures have been convicted for their roles in the financial crisis, a fact that only heightens the negative public perception in which they're mired.
So what does this return to “dull reality” equal for communications professionals?
My take is that our role is more important, more critical, and more required than at almost any time in the recent past. It's important we move past the traditional publicist role and become business advisors and reputational guardians to our corporate clients; we have an enormous opportunity to help modify corporate behavior. By extension, we'll have a hand helping ensure the survival not necessarily of the fittest, but of the best.
Scott Sunshine is co-founder of Water & Wall Group, a financial and corporate communications firm.