Jamie Dimon Had A Diamond Studded Career. What Happened?
As a senior executive at a mid-size management consulting firm in an industry where scaling is difficult and uncommon, I share with my clients two absolute cold sweat, breath-stopping fears.
The first fear is that we won’t make our numbers. This hasn’t happened in a long time, but is a necessary paranoia every company faces. The second enormous fear is one I bring up with all of my clients: Will our team be able to stay on the same page long enough to pull in the same direction without squandering our resources?
That’s alignment in a nutshell. The lack of alignment is at the top of the list of reasons why your company might fail, even when it appears that everything is headed in the right direction.
Jamie Dimon’s Nightmare on Elm Street
Lack of alignment is at the core of the three billion dollar plus loss at JP Morgan Chase. CEO Jamie Dimon is facing a Freddy Krueger nightmare—one that many of us have similarly faced. If it could happen to JP Morgan, it could happen to you and me, and it could certainly happen much worse. What Jamie didn’t know was that faulty alignment with his top lieutenants would suddenly land him in deep trouble.
One moment we’re confident of where we are going, and in the next moment we’re red-faced and embarrassed at our exposed mistakes.
In his recent interview with Meet the Press host David Gregory, just a day before news broke about JP Morgan’s massive trading loss, Jamie is smiling, charismatic, articulate, bold, and at the top of his game. Jamie justifies his position on record bank profits in a struggling economy. He tells David Gregory that banks can competently captain their own ship without help from others. JP Morgan Chase has skillfully navigated the terrifying rapids of the raging economic river of the last few years—without need for bailouts or help from anyone else.
Too bad Dimon has a ticking bomb under his chair and is clueless about what has gone south at JP Morgan Chase. Before the Meet the Press interview airs, the story breaks about the massive loss. In a second interview with David Gregory, Dimon says, “We were dead wrong,” and that interview airs before the first one.
How much time had Jamie and Ina Drew, JP Morgan Chase’s Chief Investment Officer been logging together? What about the rest of the team beneath them? What was their agreement about risk, coordination, and communication? What were their common values? The unarticulated principle that seems to rest between the lines in quotes between Dimon and Drew is, “Well, you win some and you lose some.” What a disastrous supposition.
Alignment, Accounting, and Customer Service – Are These Functions Equally Important?
Which is more important: A good accounting system, customer service, quality control, or alignment? If I say, “Alignment,” and I say that you have to work at it every day, a lot of c-level people will smile at me patronizingly. We have been duped by the typical categorization of alignment as a mere product of everyone’s best interpersonal skills working together. We all think we’ll make it if we’re a healthy combination of nice, cute, forceful, commanding, cooperative—and if we keep moving really fast.
Alignment is something you make happen. As a shoeshiner on an NYC street recently told me, “Those shoes don’t shine themselves!” The IRS, the SEC, and our own will to survive require that we get a handle on our numbers—income, outflow, cashflow, budgets, and projections. Yet we are collectively in denial about the intricate process of alignment because we choose to believe that it can take care of itself.
Executive teams are notorious for their lack of alignment, even though they have every reason to be soundly aligned. CEOs and executive teams have more skin in the game than anyone else. Their personal fortunes, reputations, and professional futures are often riding on their effectiveness as a team. If they fail, they will all share in the failure. If they succeed, they will succeed collectively.
Can Teams Align on the Fly?
Conventional wisdom would likely say not to spend time doing alignment initiatives. And if you’re not spending time on alignment, you’re in good company—the majority of companies don’t. You’ll be popular because you won’t invest time and money in the messy, confrontational, puzzling, difficult moments you will undoubtedly wrestle through in an ongoing alignment program.
But companies also used to do their accounting using stones and strings.
And it won’t be an intelligent 21st Century decision to ignore the need to align. Think about this. In the average team you have:
- Educational and personal backgrounds and biases
- Personal agendas, hidden or obvious
- Huge egos that you need, but must be coordinated
- Over-aggressive people, and others that just muddle through
- Personality clashes
- Mounting behaviors
- Distinct personal visions
And the list goes on. Handling these issues requires more than simply taking care of them in passing. It’s dauntingly tough to tackle—and disastrous to leave to chance.