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Dec
16
“You should never underestimate the man who overestimates himself.” —Franklin D. Roosevelt
This is part two from some of the lessons I learned while reading Duff McDonald’s, Last Man Standing: The Ascent of Jamie Dimon and JPMorgan Chase.
Keep Lists
On a single sheet of paper, Dimon kept a number of smaller handwritten lists, including “Things I Owe People” and “Things People Owe Me.” He started this at the beginning of his career and continues to manually manage them today. As for a list of books Dimon recommends for the aspiring CEO, “he would start with Shakespeare, adding Built to Last by Jim Collins and Jerry Porras, Only the Paranoid Survive by Intel’s Andy Grove, Warren Buffett’s annual letters, and Graham and Dodd’s Security Analysis.” Dimon also had a list for three components of a successful deal: business logic, the ability to execute and price.
Ego is Ugly
The strong working relationship that Dimon and his mentor, Sandy Weill, shared would ultimately dissolve, mostly because Weill wasn’t ready for Dimon to overshadow him. There was a point when Weill should have turned over the reigns of Citigroup to Dimon, but Weill wouldn’t do it.
In the fairy-tale version of Dimon’s career, he succeeds his mentor [Sandy Weill] and leads Citigroup to greater glory. In the fairy tale, Citigroup is not on the verge of extinction 10 years later, while Jamie Dimon is leading one of its only healthy competitors. The future of American banking, in other words, was shaped by this very moment. How much different history might have been had Sandy Weill done what Dimon fully expected him to—assure him that the job would soon be his. But Weill was not yet ready to think past his own career. He was living in the present, and he was sick to death of Dimon’s thinking they were equals. Dimon was his junior partner. And he didn’t need a junior partner on the board…
Put Some Skin Into Your Game
Dimon left Citigroup and spent 18 months figuring out what he wanted to do. He landed at Bank One, a regional bank in Chicago that would eventually go on to become JPMorgan Chase after several years of mergers and acquisitions. Upon his arrival to the top post at Bank One, “Dimon told the board he believed in ‘eating his own cooking’ and rewarded their confidence in him by purchasing 2 million shares of stock at $28.37 a share, for some $57 million, the day before his appointment was announced. The move showed he was all-in and from that day forward, nobody questioned his commitment to the job.”
Disciplined Thought Leads to Disciplined Action
This one is right out of a Jim Collins playbook. “A weak economy creates opportunities for strong companies,” said Dimon. During the crash of 2007-2008, “People expected me to come in and start doing deals,” says Dimon. “But that’s not me. I’m different. You can’t start a war until you have an army, and we couldn’t even run our own business well. I said, ‘No, we’re going to get this thing fixed and from that strength, if something makes sense, we’ll do it.’ You have to earn the right to do a merger.” This thinking “did not endear him to his spoiled colleagues. ‘He’s going down like cod liver oil,” one banker told Business Week magazine.” Someone else told Euroweek, “The news that Jamie is flying in is similar to being told that Ivan the Terrible is coming for tea.”
Consultants Should Not Be Used for Inside Jobs
Dimon doesn’t think too fondly of consultants. He especially dislikes the idea of thinking they can actually accomplish work that should be done from the inside. “We do still use smart people to do consulting for us. But it has to be with a very senior person and there is no phase two. By that, I mean at the end of the project, I have the brain and they have the money. I don’t need anyone to implement anything. That’s a joke. You can’t have outside people implement stuff inside companies. It doesn’t work. And by the way, if that’s going on, what the hell are your own people doing?”
Surround Yourself With People Who Speak Their Mind
Jamie surrounded himself with smart people who were not afraid to speak up. Jamie was the perfect model for this as his relationship with his mentor, Sandy Weill, proved time and again. Jamie was notorious for intense debates and verbal wars when it came to making sure decisions were made in the safety of wise counsel. “When you worked for Jamie Dimon, he expected you to speak your mind. If you didn’t, he’d just as soon replace you. ‘I don’t care if we do the trade or don’t do the trade,’ he told a reporter. ‘I care that we do it right…. If you work in a company where you can’t walk in the room and say what you think, you create an atmosphere where you don’t do the best you can and where people don’t disclose things.’” This environment of honest debate would often energize the team. “When you worked with [Jamie] it was almost impossible to view something as a stopping point. He was always thinking about what things could be.”
Boring Is Not Always Bad
“The International Monetary Fund estimates that stock market bubbles happen about every 13 years, and that housing bubbles occur every two decades.” Although Jamie doesn’t claim he had any corner on understanding the timing of things to come, he was always running the scenarios in his head. What’s the downside? What’s the upside? What is the worst that could happen? After a season of much market criticism for JPMorgan Chase’s consistent and relatively conservative approach to growth, Wall Street finally conceded. “At the start of 2008, Wall Street analysts had completely come around to JPMorgan Chase. Being boring was now a virtue.”
Don’t Use Re-Orgs and Change to Shift Blame
“Wall Street is a pressure cooker, and when the pressure started to get intense in 2007, the more insecure of its chief executives started firing everybody around them to make sure outsiders knew where they should place the blame. Such a strategy does enhance one’s short-term job security, but the problem with it is that when turnover gets too high, no one really knows what’s going on anymore. As proof of the point, before they themselves were dismissed, Bear’s Jimmy Cayne, Citigroup’s Chuck Prince, Merrill Lynch’s Stan O’Neal, and Lehman’s Dick Fuld had all participated in their own little orgies of firing. Dimon has resisted doing the same thing, and his firm is surely the better for it.”
It’s Okay to Be a Force of Nature
I’ll close with Duff McDonald’s assessment toward the end of the book. “It’s impossible to deny that most people who wander into [Jamie's] orbit come away feeling as if they’ve just encountered a force of nature. At a time when true Wall Street leaders seem in desperately short supply, Jamie Dimon has emerged as a moral and managerial compass for both his industry and the country itself.”
It is not the critic who counts: not the man who points out how the strong man stumbles or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly, who errs and comes up short again and again, because there is no effort without error or shortcoming, but who knows the great enthusiasms, the great devotions, who spends himself for a worthy cause; who, at the best, knows, in the end, the triumph of high achievement, and who, at the worst, if he fails, at least he fails while daring greatly, so that his place shall never be with those cold and timid souls who knew neither victory nor defeat. —Citation from a speech Theodore Roosevelt made in Paris in 1910
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One Response to “Lessons From Last Man Standing, Jamie Dimon: Part 2”
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Now I can’t decide whether you have saved me from buying the book or whether I now have to buy the book to read it for myself.
Appreciate the review and the analysis. I’m working with a small community group (www.harambee.org) in a generational leadership transition. These are some helpful thoughts and strategies for the board and staff.
Merry Christmas, R