The HBS Finance Club was honored to have Jamie Dimon, Chairman and CEO of JPMorgan Chase, give an engaging speech in a packed Spangler Auditorium on Tuesday, November 6, 2007. Jamie gave a great speech, making the audience of about 300 HBS students often laugh with his war stories from his career.
As a JPMorgan employee prior to HBS, I already had the honor to meet and listen to Jamie before this event and looked forward to inviting him to the HBS campus to share his views. As an HBS Class of 1982, he was happy to come back to campus, a short time after his attendance of the 25th year alumni reunion. It was no disappointment – it was one of the best speeches that I have been to on campus, which was not only my opinion. I summarize some of the points he touched on during his speech in this article.
Jamie started off with turning around the table. Instead of beginning a speech right away, he asked the audience what questions they would like to have answered. These initial 5-7 questions covered what he learned from his boss at Citigroup Sandy Weill, career changing moments, Bank One and JPMorgan Chase stories, leadership, whether he wanted to be a CEO and the subprime crisis. This initial session was followed by a regular Q&A at the end.
On Sandy Weill
Jamie learned a lot from Sandy Weill, though not a “mentoring type” person, and described him as a person who took chances, seized opportunities and had a good feel for things.. An interesting fact was that after Jamie left Citigroup and had lunch with Weill, the Financial Times had a cover story on that.
On career changing moments
The first thing Jamie mentioned was “luck,” which he believes is an integral part of one’s career. After his departure from Citigroup, Jamie did not work for a year and a half, thinking about what to do next. He thought about private equity and other options, was considered for Home Depot and other firms as CEO. He ruled out PE as he would have missed the action of being a CEO.
On Bank One
When Jamie took on the position as CEO at Bank One, and analyzed it, he realized the company was in in need of a turnaround. The Bank One management team and employees knew that there were issues that needed to be fixed, but no action was taken. Jamie started cutting several benefits like company cars and had to lay off 10,000-15,000 people. When bonuses for the management team were discussed, Jamie asked them how much they should get. The management team was thinking a cut of 5-10% would be enough. Jamie suggested bonuses of $0 and even offered not to take his guaranteed bonus. He viewed himself as “captain of the ship” and wanted to set an example. He turned the company around such that JPMorgan Chase became interested in a friendly merger, in which they wanted to keep Jamie and the rest of the management team of Bank One on board.
On JPMorgan Chase
Jamie jokingly said that JPMorgan Chase viewed the merger as buying Bank One, with Jamie taking control and them paying for it. When Jamie came in, he realized that there were ways to make JPMorgan Chase more efficient. It started with the IT systems that were not integrated so that conversions and infrastructure consolidations had to happen. He had to make decisions on consolidating these systems. Furthermore, margins were below where they should have been and the organization was bloated. Jamie made the necessary cuts – about $3-4 billion in expenses.
On Wall Street, management tries to find someone who is to blame and is accountable if something goes wrong or results are worse than expected. In corporate headquarters, it is easy to blame others. Jamie’s view on leadership is quite the opposite: it is based on helping others. A good leader has to step in and ask the subordinates “what can I do to help?” Furthermore, coupled with high performance standards, people will want to work for such a leader.
On the subprime crisis
Jamie has a long-term positive view on the global financial markets. True, the subprime crisis has affected the credit and mortgage markets: “the credit markets froze a little bit”. However, the equities, FX, fixed income and commodities markets are still functioning well. The current crisis is a typical crisis in the financial markets, which happens about every five years. On JPMorgan Chase, the bank has still a lot of risk but no SIV (Structured Investment Vehicle) exposure like that found at other banks and thus is in a good position to take advantage of times like this. That said, banks have to worry all the time. At JPMorgan Chase, there are about 150 trading desks that have to hold inventories and that have to be able to serve clients, irrespective of the market environment.
There is not one single competitor to fear most. One bank is better at one particular area than the other and vice versa. The competition thus occurs at the product level. To beat competition, the marketing to customers has to be right, and one has to hire good people – people to trust.
On wanting to become CEO
It is hard to aspire to be CEO. According to Jamie, one has to do the next job well – until the next job becomes that of CEO. However, he shared a story about his HBS classmate Jeff Immelt who was in his wife Judy’s section. Many people said that at some point, Jeff Immelt would be CEO of GE. That is what I call self-fulfilling prophecy.
On what he would have done differently
Jamie admitted that he has had a temper during his career, which he would have liked to managed differently, as bad temper is bad. An additional piece of advice was to say no if no is the right answer. Furthermore, when trying to find a solution, the answer is waiting to be found and is there half the time.
On work/life balance and family
Jamie believes that the family has to come first. He wanted us to make sure to think about family and the partner as marriage and kids are the hardest thing in life, not a job or the career. The way he manages to keep the relationship strong is by spending as much time with his family as possible. For example, instead of playing golf with other senior people (Jamie does not play golf), he played tennis with one of his three daughters. More harshly said, if a young parent plays golf, then that would be “neglecting the family.” Once Jamie left a executive council meeting to be able to spend more time with his family, implying “as much as I like you [the council], I don’t love you [the council].”
On employee morale
Jamie also touched on employee morale. At some point at American Express, where Jamie started his career after his graduation from HBS in 1982, employee morale was low. Management suggested giving an extra cash bonus to employees but morale did not improve, it may even have decreased. Thus, money is not the main motivator for employee morale.
Jamie concluded with an investment banking joke, which went something like follows: The investment banker is speaking to the devil from hell. The devil says “I give you all the money and prestige. I just want one thing in return: your soul.” The investment banker thinks for a few minutes and says “what’s the catch?”
To sum it up, Jamie’s speech was great, captivating the audience, and to be remembered.