A Jamie Dimon Model
Given the short-term focus of the stock market and the opportunities for huge profits, changing the culture of financial institutions is a Herculean task. Stronger regulations and competent regulators are essential but not enough. Longer-term incentives will help, but smart professionals can game any incentive system.
Changing behavior at financial institutions requires leaders with a clear philosophy, starting with a statement of purpose that translates into how employees are expected to act and how results will be defined and measured. Jamie Dimon, CEO of JP Morgan Chase, avoided the big losses suffered by other banks. Defining his bank's purpose, he said, "You can certainly sleep at night when you believe you are building an institution by serving clients. I think that companies with too many people trying to make as much money as they can in the short run are the same companies that are no longer around."
Dimon says he wouldn't hire anyone whose main goal is making money, but these are the kind of people that business schools are now turning out. Changing the financial culture in the long run requires regulation, leadership and a transformation of business school education.
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