Jamie Dimon, the CEO and chairman of JPMorgan Chase, released his annual letter to shareholders this morning, outlining various issues facing the company, the banking sector, and the world as a whole.
This year’s letter was full of his thoughts about the economy, as well as some ominous warnings about global instability and deep political divides stateside. But he also included a section with his thoughts on corporate management and leadership. “I always enjoy sharing what I’ve learned from watching others, reading and experiencing through my own journey,” Dimon writes.
Here’s some of the banking chief’s top advice to managers and executives, from broad reminders that leaders should never ditch their compassion, to specific tips like thinking about the hard problems on Sundays.
Don’t get too rigid
Dimon says that business leaders should always try hard to get to the real truth, rather than let themselves be led by their own biases.
“It’s often hard to change your own attitudes and beliefs, especially those you may have held on to for some time. But you must be open to it,” he writes. “When you learn something that is different from what you thought, it may affect many conclusions you have, not just one.”
It can be hard to change your attitudes, but he warns that becoming rigid in your thinking is the wrong move, and others can “weaponize” that obstinancy against you. He adds that butting heads can actually lead to breakthroughs, and can help avoid “binary thinking.”
“When people disagree with you, seek out where they may be partially right,” he writes.
Respect is everything
Dimon also recommends that leaders respect their employees and be mindful about earning their respect in turn.
He writes that good leadership doesn’t stop at intelligence alone, and that executives need to win the hearts and minds of their staff daily. Employees have to know that their boss is doing the right thing, and that often comes down to character.
“Good people want to work for people they respect, and they will not respect people who take all the credit and share all the blame,” he writes. “People need to know that even when you make mistakes, you’re willing to admit them and take corrective action.”
Committees can actually be your friend
Rather than denounce decision making by committee, Dimon actually recommends crowdsourcing intelligence “if done properly.”
He shares one painful memory of a major trading scandal at JPMorgan, the “London Whale,” and writes the trade should have been reviewed by the right risk committee, but wasn’t. The incident cost the bank around $6.2 billion, and it paid another $1 billion in fines.
“I have no doubt that had the trade been raised there, the flaws would have been exposed immediately, thereby dramatically reducing or eliminating the problem,” he writes.
But Dimon adds that relying too much on committees can play against you as a leader. If everyone is buddy-buddy with one another, it can lead to groupthink and too much compromise.
Clarify your vision
A great leader will also have a clear vision to match.
Dimon writes that idea often gets muddled in corporate jargon, but if you can communicate an intentional objective to staffers, they’ll follow you anywhere.
The work doesn’t stop once bosses have made their visions clear. They also have to educate, train, and empower staffers to achieve that goal. Dimon argues that’s why it’s crucial for leaders to work alongside employees “in the trenches.”
“Within an organization, people very quickly pick up the pattern of management saying one thing but doing another. Because if words and actions are inconsistent (for example, and I could give many, when we say we want employees to be treated with respect, but we allow a jerk to be their boss), confidence in leadership will be eroded,” he writes.
Have a heart
Dimon advises leading with heart in order to show employees you see and care about them, writing that’s the “secret sauce” of management.
He writes about an unfeeling misstep by JPMorgan, when the company decided to make security staff contract workers, trimming costs by cutting their health care benefits in half. Dimon says this was a heartless thing to do.
“JPMorgan Chase’s success will not be built off the backs of our guards—it will be the result of fair treatment of all of our employees—and we’re thankful that many of those guards are still with our company today,” he writes.
He adds that he reversed the decision, and that leading with compassion will reap benefits for the company, even if it isn’t always obvious.
“You know heart and soul when you see it in effect on sports teams or with ‘the boys in the boat’—it’s a beautiful thing to watch. It’s not as obvious, but it happens in business, too,” he writes.
Think about the tough stuff on Sunday
And finally, Dimon gives readers some insight into his own decision making process: confronting important issues on Sundays.
The CEO writes that he drafts a list of things he needs to mull over, and uses Sundays to think about them more carefully than he might on a weekday. He says that this method almost always leads to making headway on the given issues.
“Progress doesn’t always mean that you come to the final conclusion—sometimes it’s just a very rational next step that can put you on a path to the final decision,” Dimon writes.
