Jamie Dimon of J.P. Morgan and Bob Greifeld of Nasdaq OMX share several things in common.
Both presided over colossal blunders at their firms – a multi-billion-dollar trading loss at J.P. Morgan for Dimon, and a systems breakdown on the closely watched Facebook IPO for Greifeld. Both Dimon and Greifeld have thus far offered only general descriptions of what went wrong. Both are facing tough scrutiny from investors and regulators, with the possibility of legal action, and both executives are still unable to tally the full cost of the mishap to their institution.
And yet for all these similarities, Jamie Dimon is today the stronger executive. He has emerged from the crisis with his leadership and strategy largely intact. Greifeld on the other hand, appears to have been severely weakened, even though in financial terms Nasdaq’s loss is likely to be much smaller than J.P. Morgan’s.
How did two CEOs facing similar situations end up in such different places? Jamie Dimon did three things well:
1. He got in front of the crisis quickly. Shortly after J.P. Morgan announced its losses, Dimon got on a call with investors and took full responsibility, using blunt, assertive language. The first comments from Nasdaq were made by the head of trading operations; Greifeld d
id not comment on the matter for several days – a critical delay that allowed others to heap blame on the exchange. And blame they did – from angry brokers and investors to Morgan Stanley chief Jim Gorman.
2. He did better on television. In this crisis, Jamie Dimon’s style was very effective on television – direct, plain-spoken and slightly angry. These attributes can make him less effective in other settings, but they were ideal in the aftermath of the trading debacle. Bob Greifeld’s television appearance was a flop. Given a couple of weeks after the IPO to describe Nasdaq’s plan to compensate dealers for losses, he appeared nervous, defensive and ill prepared to describe a complex issue in soundbites – a requirement for TV.
3. He demanded accountability. Dimon ousted the senior traders at the heart of the loss, restructured the Chief Investment Office and installed a trusted lieutenant, Matt Zames, to run it. Greifeld has not yet taken any steps to hold his executive team to account.
Jamie Dimon and Bob Greifeld are far from seeing an end to their crises. But thanks to some good communication, Dimon is in a better position to turn the page on J.P. Morgan’s crisis and get back to business.