JPMorgan: Jamie Dimon and the horse he fell off
In the past week, the JPMorgan CEO has been summoned to testify before Congress and learned that his company is facing investigations by an alphabet soup of federal agencies, from the CFTC to the FBI to the SEC. He’s also had to spend a lot of time in the middle of a media feeding frenzy, offering mea culpas and referring to himself and members of his team as “stupid,” “sloppy” and “dead wrong.”
In short, Jamie Dimon has been knocked off the large, white horse he rode through the financial crisis.
Now, echoing the general consensus, nothing illegal appears to have occurred in the course of JPMorgan’s $2 billion-plus trading loss. No taxpayer money was involved, and the investigations, it seems, are largely pro-regulation, political grandstanding with a dose of schadenfreude thrown in. At least so far, nothing has happened that’s actually going to seriously damage the bank’s long-term value to shareholders. It’s just that – well, it’s just that JPMorgan made a mistake.
Guess what? It happens all the time, from Wall Street to the factory floor. Work is hard, fast and complicated. People make mistakes. God knows we’ve both made them, and if you’ve got a few years of work under your belt, so have you.
Which leads us to our main point, which is really not about JPMorgan at all, or at least not about it alone. Rather, it’s about one of the most common crucible moments in leadership – a big messy failure. Thankfully, very few screwups will garner the same level of public attention as JPMorgan’s trading loss. But the principle we’re getting at is the same. Over the course of your career, you won’t be measured just by how many mistakes you make, because you’ll make your fair share, but you’ll be measured, as importantly, by how well you recover from them.
Look, a mistake can do two things to you when you’re a leader, no matter what your level in an organization. It can define you, or it can galvanize you.
The right choice is obvious, but unfortunately, far too often, the defining thing happens anyway. The mistake becomes a leader’s identity. Stricken by guilt or self-doubt or both, he enters something of a vortex, obsessing over the blunder, searching incessantly for all the reasons it could have happened, conducting endless meetings to go over processes and procedures to prevent it from ever happening again, talking to everyone who feels affected in any possible way, and letting the breast-beating go on and on and on.
Some of that is fine, of course – indeed, some of it is absolutely necessary, especially the “autopsy.” You definitely don’t want the same mistake to happen twice! But that darn vortex of self-defeat is always around – and it only goes in one direction, down.
That’s why it’s critical for you in the post-mistake period to move swiftly from self-examination and self-flagellation to resilient renewal, to getting your people refocused and re-energized. “The past is over,” you need to say to your troops as many times as it takes. “What matters now is the future. Here’s what it looks like, here’s how we’re getting there and what’s in it for you.” The picture painted has to be exciting in its reach and vivid in its detail. And it’s got to feel real – even gritty. No platitudes or generics. People can smell, well, let’s just call it “baloney,” a mile away.
The all-too-human complication in this, of course, is that after a mistake happens, you might not be emotionally prepared to get your team all psyched up again. You may be feeling the searing discomfort of upper management’s skeptical gaze on your back, not to mention a tighter leash around your neck. You may be wondering if you really have what it takes to lead your people. Your people, in turn, may be feeling beleaguered and increasingly doubtful themselves.
And so, the vortex beckons.
Just don’t go there. Own your mistakes, analyze their causes, learn from them and clean them up – of course. But then, let them go and get back to the future. If you’re a leader, that’s where your head and your heart – and your people – belong.
And as for Jamie Dimon? Given his long record of success, we’re confident he’ll soon be back in the saddle. And years from now, we assure you, relatively few people will remember JPMorgan’s trading blunder. But everyone who works for him around the globe, a quarter-million strong, will know that he dusted himself off, got back on his horse and rode on – stronger and a whole lot wiser.
Jack Welch was the CEO of General Electric for 21 years and is the founder of the Jack Welch Management Institute at Strayer University. Suzy Welch is an author, speaker and the former Editor of the Harvard Business Review.
PHOTO Jamie Dimon, chairman and chief executive of JP Morgan Chase and Co, speaks at the 2012 Simon Graduate School of Business’ New York City Conference in New York, May 3, 2012. REUTERS/Keith Bedford