Friday, May 23, 2008

Success Secrets: Bloomberg on Jamie Dimon

Bloomberg has posted a terrific article about JP Morgan CEO Jamie Dimon . I have mentioned both Dimon, mentor, Sandy Weil (who built the Citibank Colossus) here and here. I have been fascinated with Dimon’s success ever since he was CEO of Bank One and also because of his prominence in Sandy Weil’s book The Real Deal: My Life in Business and Philanthropy .

The entire Bloomberg article is worth saving, but here are a few of the Success Secrets..

1. Stay within your “Circle of Competence. This Success Secret is deceptive in its simplicity and vast in its power. Billionaire Charlie Munger mentions it frequently. Another related Munger/ Warren Buffett hallmark: understand your business thoroughly. If this were football, the concept would be “work hard on the fundamentals”. Exotic ideas have their place, but being really good at “making the doughnuts” has a high probability of creating a winning business. There are a lot more successful accountants than Perpetual Motion Machine builders.

From the Bloomberg article:

He {Dimon} says that insurance, for instance, is an outlier for a bank. "You have to stay focused on where you can win," he says

And again…

Dimon largely steered clear of both collateralized debt obligations…and so- called structured investment vehicles”…

And again

"JP Morgan is still very interested in raising deposits the old-fashioned way," {i.e. seeking consumer deposits, credit cards, etc} …. "Dimon has access to federally insured deposits, and that's a huge advantage in the world that's developing.

2. Stay risk averse. Dimon focuses on maintaining a strong balance sheet (also mentioned often in Sandy Weil’s book),and called by Dimon, a Fortress Balance Sheet. From the Bloomberg article:

Dimon spent much of the past three years streamlining a bank he says he wants defined by efficiency, stable sources of revenue and risk management that protects assets, a concept he refers to as his "fortress balance sheet….sources of funding can disappear very quickly."

This Success Secret is as valuable in personal life as it is in business life, and as true (or truer) of small business as big business. The less debt, the better. The more ready cash, the better.

3. Intense, obsessive work ethic

From Bloomberg:
Dimon is a fanatic about details, says one former competitor, David Komansky. "Jamie has always had a full tank of gas," says Komansky, who ran Merrill Lynch from 1996 to 2002. "It's very much about having your oar in the water all the time, 24 hours a day, 7 days a week and dealing with hundreds and hundreds of unrelated issues every day. Jamie has clearly excelled at the management dimension of these jobs."

Elsewhere in the article an associate says “, that when he worked for Dimon, he rarely saw him take a break. While other executives may relax by reading about sports, "Jamie would read a 10K," he says. "It's related to his doggedness to get stuff done."

So, to review a few of the Success Secrets of Jamie Dimon

1. Read the Bloomberg article. It’s great.
2. As simple a business model as possible
3. Stay risk averse. Hone your “fortress” to withstand the inevitable chaos that surrounds life and business
4. Maintain an intense work ethic. If you’re not interested enough to work hard, it might pay to find something that will keep you fascinated.

Some related posts:

Scwheich's "Crashproof Your Life"


Scott Young on task completion

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