This One Trait Is a Leader’s Biggest Downfall

Jamie Dimon has been CEO of JPMorgan Chase since January 2006, holding the role for more than 20 years. In that time leading the largest bank in the U.S., Dimon has watched many executives sink or swim. He says that the one trait that predicts failure isn’t arrogance; it’s insecurity. 

The JPMorgan Chase CEO recently spoke on The Master Investor Podcast. He said that there are two types of people who “get a big job” — some are insecure and others are more secure. 

The problem is a structural one, Dimon said. Each promotion diminishes the percentage of the job that someone understands. He gave the example of a star mortgage trader who suddenly receives a promotion to run all of a bank’s trading. 

“Now he’s got equities, commodities, fixed income, Asia,” Dimon said. “He’s an expert in mortgages, but not in the other ones.” One more promotion, and 36 people report to him. “It induces insecurity,” Dimon said. 

True leaders who are already secure in themselves respond to that feeling in a particular way. They have “these innate skills to trust people, to get the best out of people, to not get embarrassed by not knowing,” Dimon said. 

Insecure leaders create an echo chamber

Insecure leaders respond differently to the same promotion. They create a bubble, surrounding themselves with people who boost their ego. 

“It becomes friends of Bob. It becomes PowerPoints: Make them look good, don’t tell them the bad news. And that is what causes the problem,” Dimon said. “You get that in governments too, where leaders are surrounded by people telling them what they want to hear, because they’re insecure.”

From that point of insecurity, reality begins to fade. “Reports start being modified to look good, as opposed to addressing what’s going on in your company,” Dimon said. 

A secure leader has the benefit of taking criticism as part of the course. “You’re not going to hurt my feelings by telling me we have a crappy product,” Dimon said. “Customer complaints are a gift.”

Sometimes Dimon noted that members of his own leadership team were noticeably uncomfortable when junior staff brought up problems. “That tells me something about the manager,” he said. “They probably shouldn’t have that kind of job.”

Dimon also looks for humility from new hires. He abides by a simple character test for big promotions: “Would you promote someone to a big job that you wouldn’t have your child report to?”

Dimon notices when managers recognize the work of their direct reports, adding that recognition is a form of humility. He recommends avoiding “bureaucracy, complacency, and his cousin, arrogance,” labeling all three as the downsides of every company. 

To avoid those three pitfalls, Dimon has left every JPMorgan board meeting for the past two decades so directors can discuss issues plainly, without him in the room. He called for directors to take that time to agree or disagree with him, and put their case in front of the board. “I insisted upon it,” he said.

Jamie Dimon has been CEO of JPMorgan Chase since January 2006, holding the role for more than 20 years. In that time leading the largest bank in the U.S., Dimon has watched many executives sink or swim. He says that the one trait that predicts failure isn’t arrogance; it’s insecurity. 

The JPMorgan Chase CEO recently spoke on The Master Investor Podcast. He said that there are two types of people who “get a big job” — some are insecure and others are more secure. 

The problem is a structural one, Dimon said. Each promotion diminishes the percentage of the job that someone understands. He gave the example of a star mortgage trader who suddenly receives a promotion to run all of a bank’s trading.