We've had a lot of congressional hearings -- way too many, in fact -- in which business leaders explained away some huge mistake or insisted that a disaster wasn't their fault. Jon Corzine of MF Global. Lloyd Blankfein of Goldman Sachs. The Detroit auto executives who flew into Washington on corporate jets. Richard Fuld of Lehman Brothers. The common thread: They were involved in misfortunes that were really caused by conniving competitors, regulators, the press, greedy lenders or misguided underlings. Never by themselves.
JPMorgan Chase CEO Jamie Dimon broke the mold with his recent testimony before the Senate Banking Committee over a $2 billion trading loss at the firm. By acknowledging that he screwed up, Dimon showed the kind of forthright accountability we should expect in all types of leaders. It may even make him a better CEO.
There remain unanswered questions about how a JPMorgan trading unit that was supposed to "hedge" against losses in other parts of the firm ended up generating a huge loss itself. Regulators are investigating. But Dimon has set a refreshing new standard for business honchos who have some explaining to do. "We have let a lot of people down," he said during the hearing. "The buck stops with me." When asked why he downplayed the trading loss a month before it became a full-blown scandal and sunk the bank's stock price, Dimon answered that he had been "dead wrong."
I'm no apologist for the banks or for overpaid CEOs who co-opt their boards and hoodwink shareholders. And I'm startled that there's even a debate over strengthening regulation of big financial firms that nearly wrecked the whole economy a few years ago.
But I also feel that we have lost sight of the virtues of mistakes, when they are properly analyzed and accounted for. The people's court seems to demand that if you screw up, you should be fired. We've developed a kind of knee-jerk intolerance of mistakes. There's no on-the-job learning. Making a mistake is like a badge of incompetence.
That's crazy, because mistakes are often the most instructive experiences we ever go through. The most battle-tested leaders are those who have screwed up and been forced to acknowledge their own flaws, and improve upon them. Steve Jobs had to do this when he was fired from Apple, the company he founded, in 1985. Warren Buffett has said that buying his landmark firm, Berkshire Hathaway, in 1965 was a mistake that cost him billions of dollars compared to what he could have earned with his money elsewhere. In Silicon Valley, venture capitalists seek out second- or third-time entrepreneurs whose first effort to start a company didn't fly, because they know that priceless experience comes from failing at something you're personally committed to, and owning up to the errors you made.
Mistakes can even provide key insights that are available no other way. In my book Rebounders: How Winners Pivot From Setback To Success, I interviewed and profiled a dozen people who got better by messing up. These "rebounders," as I call them, have a few important things in common. First, they learn from mistakes because they're able to dispassionately identify what they did wrong. This is uncommon. Many of us instinctively blame others or simply deny our culpability when something goes wrong. You don't learn from blaming, however; you only burrow deeper into self-pity.
Rebounders also have the confidence that comes from having been on the hot seat before, and learning that they can work through tough problems by accurately assessing what went wrong and fixing it. Working through smaller mistakes makes you more adept at addressing bigger ones. But you only get better if you acknowledge the mistakes in the first place.
When people make the same mistake more than once, it's a sign they're not learning anything, and are probably in denial about their own flaws. But people who can identify their own missteps in detail are bound to get smarter and stronger.
Jamie Dimon has been through the corporate grinder before, when he got fired by his boss Sandy Weill at Citigroup in 1998, and left New York to run Bank One, in Chicago. He made a kind of triumphant return to New York when JPMorgan bought Bank One in 2004 and made Dimon CEO of the combined conglomerate. There's little evidence he ever became vengeful over his departure from Citigroup, which takes character.
Dimon still has to demonstrate that he can repair the problems at JPMorgan and defog the blind spot that prevented him from seeing a snafu he should have spotted earlier. But being forced to explain an embarrassing mistake to shareholders, the press and Congress is pretty good training. They don't teach that in business school.
Follow Rick Newman on Twitter: www.twitter.com/rickjnewman
This was not a "mistake" or an accident, or even an oversight. This was mopre of the same bad behavior that is indicative of Wall Street today, and the Gordon Gekko mentality that greed is good, and taking undue risks with money that is not your own, all in an attempt to further maximize short term profits over long term stability of the establishment one belongs to. Too Big To Fail financial institutions such as Chase should either abide to appropriate regulatory standards, or be broken up so that if they collapse due to a cataclismic meltdown, it would not impact depositors or the economy.
And by the way, based on your nonsensical passive-aggressive article, yes, you are an apologist for the banks and the CEOs bad behavior.
Please don't confuse power with competence in a rigged game.
It's the joy of decentralized mgt, & trading units, you can't find out about the bets you didn't know were made until they've come out jokers. Bets on both sides with multiple counter-parties who have, in turn, also hedged both sides the deal and/or sold to downstream "unsophisticated" customers.
Anyone else would have resigned or been fired. In Japan... well- never mind.
You've got to admit- it is nice having friends in high places.
Maybe you'll get that cherished interview, eh?
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Since the news got ahead of his story, he has changed completely to damage control mode accepting responsibility but refusing to get into any details which could prove his company's culpability or assist the Senate in figuring out what really went wrong with the loss.
To "rebound" implies--rather strongly--that you've been "down." Jamie has never been "down," and he's not "down" now, no matter how you try to portray him as a victim.
Jamie has perpetrated, nay, defended the most massive fraud in history. Jamie's compensation last year was $17 million--$17 MILLION.
It’s obvious that banks and their stooges are hardly heroes.
Jamie got a pat on the back by the Senate. No surprise there: those fellas are drooling over Jamie’s ability to fatten their campaign coffers. What happened to Jamie with the $2 billion loss (or was it $4 billion? Or $8 billion?) and the Senate hearing is not a "rebound." He has never struggled—or, if he has, there was no epiphany. Jamie has come down solidly on the side of taking--defrauding--the poor and middle class. He's hardly a role model for anyone needing guidance for a moral, Golden Rule kind of life. I wouldn’t point to Jamie Dimon and say to a kid: see, that’s what you should aspire to in life.
You, Mr. Newman--in my opinion--are taking advantage of a current event and trying to lasso your rope onto this "current event" and tie it to your book. Nope, sorry, didn't work. I do think you’ve got a future though—as a comedian, because your headline was pretty darn funny. Hilarious, in fact.
Jamie is no "rebounder;" he's a poster child for everything in America that you don't do!
Dimon's 'mistakes' led to Americans losing $20T of their household wealth. There are some mistakes that an admission and apology just can't cover or that anyone should be allowed to recover from - Dimon has made those kinds of mistakes.
The fact is, like many of his Universe Master colleagues, he could really give a rip about his mistakes and he has no intention of being called to pay for them and deep down, the guy isn't sorry at all...he's a rich and powerful man...his mistakes aren't going to hurt him one bit because he pays off government to ignore and forgive them.
cut it out
He said revealingly that he wasn't familiar with the Volker rule, yet he was one of the ones who led the fight to suppress it.
So just think of Dimon as the Lazlo Toth of the Volcker Rule.
Could your commentary be an opportunistic attempt to defend Dimon and promote yourself?