Until recently, Jamie Dimon was the outspoken Wall Street banker who walked on water.
As the head of America’s biggest bank, JP Morgan Chase, he was feted as the great survivor of the Global Financial Crisis and widely acclaimed as "America's least hated banker".
But that reputation has been severely dented in just a few days after he admitted the bank lost at least $US3 billion trading high-risk credit default swaps - complex financial instruments linked to the GFC.
Typical of any big corporate crisis, the company’s share price has plummeted, three top executives have been shown the door and the first lawsuits have been filed against Dimon and the firm.
Dimon, who pocketed around $US23 million last year (you might remember in February he made fun of lowly-paid journalists and mocked newspapers for struggling to turn a profit) is in the hot seat as the company faces a criminal probe by the US Justice Department.
It's a classic example of how powerful people and brands can go from hero to zero when a crisis hits.
If there's a saving grace for Dimon and his firm in all of this, it's that they responded quickly and openly, laying most of their cards on the table and taking ownership of the blunder.
Most crisis communication experts seem to agree that JP Morgan's response over the past two weeks has been almost textbook.
The firm had a well-oiled crisis communications plan in place many months (if not years) before disaster struck and it was followed with military-like precision. Based on reports, the firm even set up a "war room" at its Park Avenue headquarters in New York as key executives tried to piece together what had occurred and when.
Before he was allowed to speak publicly, Dimon was put through a series of role play interviews with executives who tested his response to key questions about the size of the loss and whether executive pay would need to be repaid. And they pushed to see what he would reveal about the trading blunder.
Unlike the BP disaster, where so many executives contradicted one another, Dimon was the firm's sole voice when he was wheeled out on what New York Magazine called an "apology tour", starting with a surprise conference call with a group of hand-picked financial analysts.
The campaign of contrition also included a convivial appearance on NBC's Meet the Press (he re-taped an earlier interview once the loss was revealed) where he was contrite, spoke in short sentences and apologised directly.
At JP Morgan’s heavily-guarded shareholder meeting, where TV cameras were banned and protesters waved placards, he didn't shirk his responsibilities, admitting: “This should never have happened. I can't justify it. Unfortunately, these mistakes are self inflicted." He spoke about the crisis for just four minutes.
Dimon gets top marks for talking openly about the trading loss and the steps JP Morgan has taken to "fix it, learn from it and be a better company". And for apologising quickly – that’s the key in any crisis.
It's worth remembering that people don’t necessarily judge you on the basis of your mistakes - they judge you on the manner in which you own up to them. So on that score, Dimon passed. His responses weren't always convincing or clear, but he remained calm under fire.
However, I believe he missed a golden opportunity to instil confidence in his leadership and provide an assurance to investors who park their money (and their trust) in JP Morgan Chase.
The big unanswered question is how, as a CEO who resisted tighter banking laws, he didn’t see this coming. Presumably he has been advised not to go there for legal reasons.
Still, his reputation is tarnished more for the maverick way that he dismissed media reports of a problem back in April - before he was even certain of the facts. Reporters seemed to know more about the problems lurking beneath the surface than he did.
It’s a valid reminder that in any situation, if you’re not fully informed, stick to what you are certain of. What you say, when you say it, and how you say it, are all critical in the age of social media and ill-informed comments can come back to haunt you.
Most brands won’t face a PR disaster of the scale of JP Morgan, or Enron or Worldcom or the countless others before it. But it’s almost certain that every brand will face a crisis of sorts at some point in their history, whether it be a faulty product or an employee behaving badly.
That's why organisations large and small need to routinely assess their risk for potentially disastrous events and develop a robust crisis response plan for worst-case scenarios. You need to anticipate, prepare and practice before things go wrong.
This is where BP failed two years ago after the Gulf of Mexico oil spill, just as the owner of the Costa Concordia failed when the cruise liner ran aground off the coast of Italy. They simply didn't plan for the likelihood of disaster and were like deers in the headlights when the worst case became reality.
In the midst of a crisis where an organisation appears to be at fault, spokespeople need to admit there's been a blunder; express sincere concern for those affected; and firmly state the company’s commitment to identifying the cause and ensuring it never happens again.
It’s crucial that all organisations - whether they be corporates, government, charities or sports clubs - spend some time thinking about how they would handle a crisis when the media comes knocking.
You can’t plan for every single thing that could go wrong, but it’s crucial to establish some ground rules and make sure you have the right team and procedures in place. Keep in mind that the best plans are worthless if they exist only on paper: they need to be tested, updated and revised regularly.
So before you find yourself in the eye of the storm, consider whether your organisation has planned for its JP Morgan moment. It's never too early to be crisis ready.