Franklin Delano Roosevelt revolutionized Presidential communication in 1933 with his fireside chats, where he used the growing power of radio to invite listeners into the White House and to join them in their living rooms.
In the midst of the Great Depression, that type of personable and direct communication helped FDR get his message directly to the citizens and instilled confidence in the nation's leadership at one of its lowest economic points. What's more, that style of "personalized" mass communication assuredly played a role in FDR's unprecedented three re-elections and in establishing his legacy as one of our most revered leaders.
Sadly, most governmental bodies and financial companies today are not as adept as FDR when it comes to getting their messages out using new communication technologies. Talk of recession in America has solidified into acceptance by a significant portion of the U.S. population. With financial-services companies posting drastic losses, quarterly profit forecasting in disarray, and the government doing little to instill confidence while facing the duel threats of rising gas and food prices, we can't help but question how:
• Governmental powers can better communicate with the nation during an economic downturn;
• Corporations can converse more openly and efficiently in a time of lowered economic confidence;
• Both might use digital tools to revolutionize how they reach their audiences.
The Financial Turmoil of 2008
An anecdote to illustrate the state of the industry is the recent story of AIG (AIG). The biggest insurance company worldwide, AIG has suffered hits in public credibility in the past few years, first from an accounting scandal and then from vastly underestimating a $5.29 billion loss for the last quarter of 2007.
With industry analysts complaining about AIG's lack of transparency throughout the crisis, it seems that timely digital communication could have better prepared AIG's multiple audiences for the pending news. While the company is making significant changes to overcome these setbacks (including the recent appointment of Bob Willumstad to the CEO position), AIG's customers, business partners, and investors still need significant reassurance that the company's top management is competent and has confidence in its current business model and long-term goals.
Perhaps the most troubling financial controversy this year, however, was a governmental one: the Federal Reserve's bailout of fallen Wall Street titan Bear Stearns. The story was particularly troubling because of the utter lack of transparency surrounding the Federal Reserve's intervention.
Political Communication in a Digital Age
By contrast, we've seen that the Presidential campaigns are skilled in using social media to communicate with and mobilize their constituencies. Senator John McCain (R-Ariz.) and Senator Barack Obama (D-Ill.) have official social networks on their campaign sites (McCainSpace and my.barackobama.com), official campaign blogs, and are on such popular social networks as Facebook, MySpace, and LinkedIn, and video site YouTube.
Additionally, Obama's camp gives regular updates through Twitter, constantly adds new images from the campaign trail through Flickr, participates in a variety of smaller social networking sites, and has launched FightTheSmears.
com to disprove unsubstantiated rumors circulating about the Democratic nominee.
But what happens once one of these candidates is elected to office? What would be the modern equivalent of the fireside chat? How can tools like LinkedIn and YouTube be used to provide a more transparent government?
We recommend government to act in two crucial ways to help facilitate an environment where there is transparency and efficient communication.
First, governmental branches, from the White House to the Federal Reserve, should find ways to revolutionize mass communication to invite citizens into the democratic process in innovative and timely ways. We're not suggesting Chairman Ben Bernanke should be blogging about his opinion on every financial event, but a blog or podcast would be the perfect tool to help explain the role of the Fed, and what does and does not fall under the Reserve's purview. At present, the Fed's static, dense Web site does in fact offer plenty of information, but its failure to incorporate any aspects of Web 2.0 makes it much less useful.
The White House today continues the weekly radio addresses pioneered by FDR and offers regular press briefings, weekly e-mail updates, and occasional Presidential press conferences. However, the information conveyed here lacks in both depth and accessibility when compared to the information supporters are inundated with by Presidential campaigns.
Perhaps the most promising title on the White House's official site—"White House Interactive"—leads to a question-and-answer section, with the most "recent" question dated Mar. 26, 2007. The question: "George W. Bush is what number as President of the U.S.?" Talk about useless information.
Our second suggestion is that many of the Securities and Exchange Commission restrictions that regulate how financial companies communicate should be updated to reflect the realities of a Web 2.0 world. What new methods for more efficient and open communication might be employed, and how might stakeholders and companies alike benefit from such use? The chill factor of SEC sanctions often keeps these companies from even exploring such options.
Government 2.0 Optimization
Blogs, podcasts, and online forums are all ways to get a conversation started online. But, until our governments and businesses understand the thinking and strategy behind using Web 2.0 tools and social media, they will remain out of touch with their audiences. Some public and private institutions are demonstrating a strong desire to take advantage of new ways of reaching their audiences. Initiatives like "E-Democracy in Minnesota" televise state legislative meetings online and allow citizens to send comments directly to lawmakers.
General Motors (GM) Vice-Chairman Bob Lutz is just one example of a corporate leader who has developed a strong voice through his blog, GM Fast Lane, providing readers with information about the latest technologies in the automotive industry rather than constantly hyping GM's brands and products directly. Sun Microsystems (JAVA) CEO Jonathan Schwartz has said he believes blogging to be the best, fastest, and most transparent way to communicate with the company's constituencies.
During a Presidential election and a crisis in economic confidence, power brokers in government and business alike need to realize it's crucial to use these new tools to better communicate with the nation, and our communication regulators need to be sure today's laws reflect the realities of a Web 2.0 world.
Finding the digital equivalent of the fireside chat is an ideal way to start this process. We can only hope that, come January, our new leadership puts at least as much energy into using digital tools to explain what they're doing to make good on their promises as they did in selling them to us.