Jamie Dimon's Turnaround Leadership at Bank One

Introduction: The Challenge of Fixing a Failing Business

An executive who comes into a failing business with the goal of turning it around faces a number of significant challenges. The biggest strength of an existing business is that it already exists — but that also happens to be its biggest drawback. Established businesses not only have existing customer bases and successful work habits, but are also likely to be entrenched in failing ones. In addition, someone brought in to fix a failing business will inevitably be perceived as a threat by those already working there, because almost every successful reorganization results in some loss of employees. An incoming executive in this position is therefore likely to face resistance. This paper examines how Jamie Dimon attempted to deal with the problems inherent in reviving a failing business and approached the challenge with an entrepreneurial spirit, so that the organization could be reinvigorated.

Signaling Commitment: Dimon's Early Actions

When Dimon initially came to Bank One and began to restructure it, he was trying to do more than simply learn about the situation. He wanted to ensure that people understood he was genuinely invested in the process. For example, "Dimon purchased 2 million shares of Bank One at a cost of $57 million" when he became the new CEO (Marshall & Thedinga, 2006). This represented approximately half of his net worth. This investment helped demonstrate his motive, which is one of the three necessary characteristics for a leader identified by Forbes contributor John Baldoni. According to Baldoni, "motive is purpose, the why of your life and the why you want to be in charge of other people's lives" (Baldoni, 2012). In Dimon's case, money was not the motive — but his financial investment sent a clear signal to Bank One employees that he believed in the company and that he was confident he could turn it around. In fact, he had staked much of his personal fortune on it.

The idea that Bank One could be made successful again was the primary signal Dimon was sending to the organization. He reinforced this not only through financial investment, but also through his approach to staffing decisions. Rather than replacing executives without appropriate vetting, he took on additional responsibilities himself until he could identify the right people for each role (Marshall & Thedinga, 2006). This demonstrated his own willingness to work; he was not merely asking others to work hard — he was visibly present at all levels of the organization, making clear that he was personally committed to the turnaround. He also chose to take an office in the midst of the other executives rather than isolating himself in a corner office, deliberately avoiding the image of a detached, stand-apart CEO. He was equally attentive to the signals he was sending to Wall Street, understanding that every action he took would be interpreted as an indicator of the company's potential — and that perception would, in turn, influence the probability of actual success.

Entrepreneurial Leadership in a Turnaround Context

While Dimon was attempting to turn around a failing company, in many ways he approached the venture as if he were an entrepreneur. According to Amy Sterling Casil, the top ten characteristics of an entrepreneur are: (1) discipline and organization; (2) great reputation; (3) passion; (4) balance; (5) technology savvy; (6) great negotiation skills; (7) accessibility; (8) sales ability; (9) positive attitude; and (10) imagination (Sterling Casil, 2012). Looking at Dimon's behavior when he arrived at Bank One, it is clear that he demonstrated many of these qualities. He brought a well-established reputation in the industry, even though Bank One was larger and fundamentally different from his previous ventures. He made himself accessible to people throughout the company so they knew he was present, available, and open to suggestion. Perhaps most importantly, Dimon maintained a positive attitude; he was committed to the corporation's success and consistently communicated his belief that the turnaround would work.

Conclusion

Dimon knew he faced substantial challenges when he assumed leadership at Bank One, but he was optimistic about his ability to make the company successful. He wanted to identify the organization's strengths and weaknesses — capitalizing on the former and mitigating the latter. However, as an outsider coming into an established organization, he first had to convince existing employees that he was committed and capable. All of his early actions demonstrated a clear understanding that he had to establish himself as a credible leader before he could effectively function as one.

References

Baldoni, J. (2012, October 1). Three traits every great leader must demonstrate. Forbes. Retrieved December 13, 2012, from http://www.forbes.com/sites/johnbaldoni/2012/10/01/three-traits-every-great-leader-must-demonstrate/

Marshall, P., & Thedinga, T. (2006, February 27). Jamie Dimon and Bank One (A). Harvard Business School Cases. Boston: Harvard Business School Publishing.

Sterling Casil, A. (2012). Top ten characteristics of an entrepreneur. Chron.com. Retrieved December 13, 2012, from http://smallbusiness.chron.com/top-10-characteristics-entrepreneur-18487.html