January 21, 2025 • 34 mins
The Unshakeables is back for Season 2 — and it’s kicking off with an episode you absolutely won’t want to miss. Listen in as Ben Walter sits with a very special guest: chairman and CEO of JPMorganChase, Jamie Dimon. One of the world’s most respected financial thought leaders, Jamie will connect the dots between the current challenges facing small business owners and the broader financial landscape. And, of course, it wouldn’t be an episode of The Unshakeables if Jamie didn’t share some of the pivotal moments that he overcame to forge ahead in his own career.
This season Ben will also be joined by some new co-hosts, all of whom are making waves in business and culture in their own right. In this first episode, you'll hear from Kathleen Griffith, founder of Grayce & Co. and author of Build Like a Woman.
The Unshakeables is brought to you by Chase for Business and Ruby Studio by iHeartMedia.
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Episode Transcript
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Speaker 1 (00:03):
Ruby.
Speaker 2 (00:07):
Usually on The Unshakeables, we hear about small business owners
stuck between a rock and a hard place, running up
against a make or break situation. Well, moments like that
don't just happen to small business owners. They also happened
to big companies and their CEOs, people running some of
the largest corporations in the country, people like my boss,
Jamie Dimon.
Speaker 3 (00:28):
When I realized I was sitting at my desk, I
didn't realize this to very of the problems I was
going through, the actual trade positions, and my heart fell out.
Speaker 2 (00:38):
There were a series of trades that the London office
of JP Morgan Chase made in twenty eleven and twenty
twelve that would come to be known as the London Whale.
As soon as he found out about them, Jamie knew
he had a problem.
Speaker 3 (00:51):
And I knew at that moment we're going to lose
billions of dollars. I had not expected that.
Speaker 2 (00:56):
It caught me off guard, but instead of panic, instead
of lashing out, he calmly went to break the news
to everyone. And when I say everyone, I mean to
the board, to the media, but most importantly to his
employees at the firm. Whatever was going to happen. Jamie
took responsibility.
Speaker 3 (01:14):
All these bad headlight said, forget all of that, take
a deep breath, don't overreact. We have a couple hundred
thousand people work with this company. More important than that
they serve. As you mentioned at the Times, by four
million small businesses, serve your clients. Ignore the other stuff.
Do a great job your clients and your communities. We're
going to get through this.
Speaker 4 (01:40):
Hi.
Speaker 2 (01:40):
Everyone, it's Ben Walter with a big welcome back. We're
officially kicking off season two of The Unshakeables, and I'm
excited and ready to share some incredible stories with you.
I'm impressed every day by small business owners, and I
can honestly say that this season continues to surprise me.
Just when I think we've heard it all, I speak
with another small business owner that reminds me just how
tenacious and creative you have to be to start and
(02:02):
run a company. I can't wait for you to hear
their stories. But today we're doing something different. Our guest
is not only the CEO of America's largest bank, he's
also a longtime champion of small business and its ability
to lift up communities. My colleagues, and I get to
learn from him every day. I'm thrilled to welcome to
the show my colleague and my boss, Jamie Dimon, the
(02:23):
chairman and CEO of JP Morgan Chase, Welcome to the show.
Speaker 3 (02:26):
Grilled to be here.
Speaker 2 (02:28):
I also have a great co pilot joining me. Kathleen
Griffith is an entrepreneur, author, and founder and CEO of
Build and Grayce & Co. She'll be joining me throughout the season. Kathleen,
Welcome to the Unshakeables. We're thrilled to have you.
Speaker 1 (02:42):
So glad to be here with you.
Speaker 2 (02:45):
Kathleen, you have so much experience as an entrepreneur and
as a small business owner yourself, so I know you'll
be a great addition to the show today. I'm looking
forward to getting your take on Jamie's insights and advice
ready when you are on today's episode. Chairman of the
board and CEO of JP Morgan Chase, Jamie Dimon. The
(03:05):
theme of our podcast what we talked to small business
owners all the time is colloquially their oh Shit moment.
We talked to them about the time that they really
weren't sure they were going to make it. Have you
had any of those moments running businesses in your career
and can you tell people a little bit about it,
what you learned from it and what you did with it.
Speaker 3 (03:20):
Yeah, people are talking my career and stuff like that.
They almost never mentioned the fact I was fired from
the place I'd worked for for fifteen years. That was
kind of an O shit moment. But you know, listen,
there's some of them are real, like when you make
real mistakes, usually people mistakes. They're hard. Or you do
acquisitions like Bear Sterns in the middle of a crisis.
You're buying a company with thirty thousand people, three hundred
(03:42):
million of assets. You're scared. You have to then execute
all the consolidation, et cetera. That would be one. We
had a big trading problem. It's called the London Whale.
I'm sure when I've died, I'll be You know, you
did a good job, but for the London Whale. But
that to me, yes, that was O shit moment.
Speaker 2 (04:00):
For those of you who don't know, The London Whale
was the name given to a significant loss incurred by
JP Morgan Chase in twenty twelve. A series of investments
made by one trader in the London office had gone bad.
At first, the teams thought it looked like a relatively
standard loss. Very quickly Jamie realized it was much larger.
Speaker 3 (04:20):
The loss was billions, and it could be billions more.
I had not expected that, he caught me off guard.
I immediately told the board, and I went on radio
or TV. I said, we made a terrible mistake, bad
risk management, bad this, bad that, and it's my fault,
and I'm sorry.
Speaker 2 (04:37):
Jamie didn't just own up to the public and the board.
He talked to all the JP Morgan Chase employees.
Speaker 3 (04:43):
I got all the people together inside the company and
I told them this is gonna be terrible. They're going
to accuse us of this with the one bank that
didn't have these proms and now we do, and Diamond
off his white horse and all these bad Headlines I said,
forget all that, because very often what happens, and you
quote have this crisis a company, it makes it worse.
The bosses crying and spilled milk, and everybody's waiting to
(05:03):
see what's going to happen. Meanwhile, our day to day
job didn't change.
Speaker 2 (05:09):
This is something we've heard a lot on the show.
It's not just about what happens, but it's about how
you respond to it that really matters. Jamie told the
press as much. The day after the London whale story broke.
He pulled up to the office around seven am and
the press was already outside, cameras at the ready.
Speaker 3 (05:27):
I walked out. All the cameras can run up to me,
you're gonna lose your job or how much money you're
gonna lose. I looked up at them, I smiled, and
I looked up to Bill and said, if you want
to know something, there are seven thousand people work in
this building, and how proud I am of every single
one of them, and we're gonna do a great job
every day for our clients.
Speaker 2 (05:46):
One of the recurring themes that comes up from every
guest on the show is how deep inside them they
had to reach to get through those moments to really
find the grit and the drive and the energy. Where
do you get yours from?
Speaker 3 (05:58):
I grew up with some basic value, do the best
you can, treat every respect, make the world a better place.
And I literally feel that way when I wake up,
and then when I see our people around the world
what they're doing for their clients and their communities and
their countries. That's where I get my motivation. I feel
being the boss is a responsibility and it's an honor
(06:20):
and it's a privilege. But you owe the people, you
owe the clients, and so I really feel that pressure
to make sure I do a good job. If I don't,
a lot of other people you get hurt.
Speaker 2 (06:30):
We're lucky, as you know, to serve more than six
million small businesses every day, hopefully closing in on seven
million soon. And the last few years have been interesting
because business formation has been at levels we haven't seen
ever in the history of the country. What should small
businesses expect and how should they feel about their contribution
to America in that environment?
Speaker 3 (06:49):
Yeah, so, you know, small businesses have always been a
critical part of the country. They're more than half full
of the jobs, a lot of formation. It's for very
strong economy, it's confidence, all those various things. But also,
I should be playing a small business in big business
a symbiotic. Very often when their plans is built somewhere
for a big factory, three or four times as many
jobs outside of the company, you know, doing small services
(07:12):
and food and engineering and consulting and we're all kind
of grow together each year.
Speaker 2 (07:18):
It's estimated that federal regulations cost small businesses around fourteen
seven hundred dollars per employee. That's twenty percent higher than
for larger businesses. Small businesses tell us that they feel
the weight of regulation, and they feel the weight of
all these changes on them, and sometimes they feel like
they don't have a voice. How do we give them
a bigger voice?
Speaker 3 (07:40):
We all go in these bus trips together and we
always have lunches and dinners with a lot of small
business people. You hear about the regulations, the audits, the local,
the federal, the state audits, how long it takes to
fill out their taxes and get permissions and licenses and permits.
They have a voice, you know. They do have a
voice through chambers around the country so much are actually
quite capable around the SBA. But I think sitting here
(08:03):
with you, Ben, we can help give a better voice
too and get to the government all the things would
do that can help foster, nurture and grow small businesses.
Speaker 2 (08:12):
Yeah, we try to get them involved and we encourage
them to use their voice and to speak up for
the issues that they're passionate about and to try to
give them a platform. I want to pivot to where
people's heads are at the moment. I've followed the NFIB
Confidence Survey now for the better part of fifteen years.
It's been trekking along at an all time low. Suddenly
spiked to a pretty high level actually after the election.
(08:33):
The NFIB is the National Federation of Independent Businesses, and
they publish something called the Small Business Optimism Index, which
is a metric that shows us how small business owners
are feeling about the state of business in America. Between
November and December of twenty twenty four, I saw that
number jump more than I had ever seen in a
single month.
Speaker 3 (08:53):
I think, whether you're a Democrat or Republican, business actually
feels pretty good about the oncoming pro business environment, pro
investment environment, and things like that.
Speaker 2 (09:04):
But we are still hearing when we survey that rising taxes,
wage costs, inflation, those things continue to weigh on businesses.
And one of the things I've been lucky to learn
from you is about risk management and how to really
think about a risk culture. So what should small businesses
be worried about and what should they do about it?
Speaker 3 (09:20):
In terms of risk management, it doesn't matter what business
you're in. Obviously, every business is different. So if you're
a bank, our biggest risks or interest rates and credit
exposure and things like that. But if you're certain types
of other companies, your biggest exposure might be what's the
cost of oil, what's the cost of energy, what's the
cost of transport, and other areas might just be what's
the cost of wages or something like that. So I
(09:41):
think every business should prepare and think through a wide
range of potential pros and cons slower growth, higher costs,
so they can handle it. Because survival is half the
name of the game. You could talk to anyone out there,
from big companies to smaller companies. If you can get
through tough times, then you can really do quite well
in good times and sure a better workforce and make
(10:01):
different types of investments. That the economy is kind of
like the weather. No matter what you think it is today,
it may not be sunny tomorrow, and so you need
to be prepared for that. So we just have very
blunt open conversations. Can you handle this, What does it
mean to you? How are you going to do it?
So you're basically prepared. You're thinking through what a plan
might be, how you might deal with it. It also
very often stops you from overexpanding. People get exuberant and
(10:23):
you know, over expanding. All of a sudden you have
a downturn. Now you have a lot more overhead or
something like that. So just being prepared, thinking through, having
an honest assessment, always think about what can go wrong
to not just about the things that can go right,
and you get better and smart as you go on.
Speaker 2 (10:38):
So how do you lead a team through that when
you see the bumps in the road coming, when you
see the downturn coming, how do you convince people that
work for you to persevere through that.
Speaker 3 (10:48):
First of all, we're totally honest with everybody. The things
that we say publicly privately right about that you hear
in the management meetings is the same stuff. You should
always celebrate your positive you should always celebrate your wins,
but every now and then to sit down, emphasize what
you're not doing well and that sometimes there are bad
times out there. So you've got to be a little prepared, And.
Speaker 2 (11:07):
How do you develop the judgment for you know, things
are changing, maybe they're getting worse, maybe they're getting better. Nope,
I'm gonna stick with my plan and I'm going to
power through. Or it's time to think differently, it's time
to stop, turn look and rethink things.
Speaker 3 (11:19):
Well, I think there's a bunch of things here. So
when it comes to growing and investing and expanding, I
try to run a business that we don't worry about
the weather. I don't want you to change those plans.
I do think you have to take a very deep
look at yourself. Sometimes I don't care if you're a
big company or a small company. Sometimes you're slowing down,
the weeds are growing, Bureaucracy builds in you and your job.
(11:40):
Ben you have to deal with risk, legal, credit, compliance, audit,
finance from the big corporate headquarters who's making demands on you.
They may not necessarily fully understand what those demands are,
and so it's always important to like refresh it, rethink
it through, be honest, criticize yourself. And we've had if
you look at it, we've had a good time for
it a long time. We have not had a real downturn.
(12:02):
COVID had this you know, momentary downturn, but we haven't
had a downturn for a long time.
Speaker 2 (12:08):
One of the things I tell people. I started my
career in the mid nineties, and we actually haven't had
a normal I'm gonna call it a normal garden variety
recession in my entire career. We've had crises and good
times and nothing in between. Right, people have forgotten about
the normal business cycle.
Speaker 3 (12:21):
I feel like that's correct. Yeah, you had so you
lived through the Internet bubble that was kind of temporary
because this docks went up, they came down. You lived
to the Great Financial Crisis. That absolutely is not a
normal thing. But you're right, we have not had a
normal garden variety recession in quite a long time. And
it's not just a recession. You might have things that
you don't expect, like interest rates going up in a recession,
(12:41):
inflation not going down the way you'd expect it. And
you see that today where you know, all of a sudden,
people saying, wait, inflation's not going away so quickly, and
the Fed's gonna have to adjust. You always have to
be prepared for things that you don't expect, and you
always want to bank in your corner that's going to
be there for you through good times and bad times.
Speaker 2 (13:00):
Kathleen, I think this would be a good time to
get your take. A lot of that conversation focused on
risk and managing risk and having a culture of risk
in a business. So I'm curious, from your perspective, as
someone who has started businesses and who works with small businesses,
how do you tell them to think about risk.
Speaker 5 (13:17):
For a lot of small business owners, it's seen as
an expensive luxury. It's boring and not something they think
they can afford to do right now. You know, they're
just kind of running fast with super sharp scissors. But
as Jamie talked about in this episode, there are as
many types of risks as there are types of businesses,
(13:37):
everything from labor to lawsuits, to competitors to cybersecurity, to
supply chain, to cash flow to cost of goods. The
list goes on, and so you really need to first
and foremost identify what those risks are for you as
a small business owner. For me, the biggest risk is
(13:58):
exposure and liability. So I put three things into place
early in my business so I could sleep through the night.
The first was just setting up a business that's protected
the formation.
Speaker 1 (14:09):
Of the company.
Speaker 5 (14:10):
The second was making sure that I had liability insurance
in place and all my exposure points were covered, and
the third was really just managing contracts and agreements, making
sure that those were ironclad, and paying for really good
lawyers even before I could afford them.
Speaker 2 (14:30):
One of the things that people like me who work
for big companies have the advantage of. Even as CEO
of Chase for Business, I have a team that's designed
to challenge me. It's designed to say, hey, Ben, did
you think about this? Or what if this happens? But
in a small company where it might be just you
or you and a few people, how do you facilitate
that sort of cognitive challenge? How do you make sure
(14:52):
that there's somebody who's thinking about the other side of
the trade right?
Speaker 5 (14:56):
The most important thing I would say is just to
really focus on on owning that as a founder yourself,
so you don't really have anyone to delegate to. You've
got to be on your front foot thinking through everything
that can possibly go wrong in your business.
Speaker 1 (15:12):
So it really is a lot of trial and error.
You learn by making.
Speaker 5 (15:16):
Mistakes, a lot of them are costly, and you decide
you're not going to do that again.
Speaker 2 (15:21):
One of the other things I want to talk about
is the business cycle. I mentioned this to Jamie because
I think about this a lot, particularly from a bank perspective.
We haven't really had a normal business cycle. We had
the dot com bubble, and then we had the Great
Financial Crisis, and then we had COVID. These were sort
of headline type, you know, the world is melting down
kind of things, as opposed to we had growth, and
(15:45):
then we had a recession, and then things got better
and we had growth again.
Speaker 5 (15:48):
How do you think that small businesses should prepare for that?
Speaker 2 (15:52):
My view is there's no real way to prepare for
something like COVID, where some businesses had, you know, an
eighty five or ninety percent drop in demand. I just
don't think that's a reason that's such a black Swan event.
But I think you can plan for what if I
lost my largest client, or what if demand in the
aggregate were down fifteen to twenty percent? What would I do?
(16:14):
How would I survive that? When I talk to clients,
I always say plan for the sort of middle of
the Bell curve, not the very extreme ends of the
Bell curve. Not that you can't think about some of
those things, but those kinds of things are what insurance
is for, or for other things because there's no way
you'd have the financial wherewithal to stomach it.
Speaker 5 (16:31):
Yeah, and I liked a lot what Jamie was saying
about people get over exuberant and so over expand and
so really taking a step back and assessing your business
periodically to make some you know, strategic changes to make
sure that we're prepared for changing times.
Speaker 3 (16:49):
Yeah.
Speaker 2 (16:50):
The other advice I have for small business owners with
respect to this is you can have too much of
a good thing. And I don't know what that good
thing is. It's different for every business. But whenever something
is going really well and just constantly, constantly going really well,
over and over and over again, that should also make
your antenna go.
Speaker 5 (17:07):
Up right, and so you may have the sense that
you've got a really healthy business. We hear all the
time when you get under the hood of the car
and you're asking about allocation, someone saying, well, eighty percent
of my business is coming from this one retailer.
Speaker 1 (17:20):
Yeah, what if they go under, You're out of business.
Speaker 2 (17:24):
Okay, let's get back to Jamie. Jamie and I had
a wide ranging discussion about risk, and we ended up
talking about one of the specific types of risk that
we have to manage at JP Morgan Chase. A few
weeks ago, on Joe Rogan's podcast, Mark Andreesson whos
a prominent venture capitalist, talked about de banking and that's
something you and I have had to deal with, is
some of the myths and truths around that. Can you
(17:46):
talk a little bit about how that works and what
is debanking and how do we think about it here
at JP Morgan Chase.
Speaker 3 (17:52):
Yeah. I called Mark Andreessen after that as your friend
of mine, I want to explain to him we have
not debanked anyone because of political or religious relationships period
Now when we debank so and they often blame that reason,
but that's not a reason. We don't bank marijuana companies
because there's no federal law around it. We simply can't
follow the law. If there's a federal law, we probably would,
(18:15):
and we do bank some crypto companies and very carefully.
We are responsible in the law to fight sex trafficking,
money laundering, tax avoidance.
Speaker 2 (18:24):
It's the Bank Secrecy Act right.
Speaker 3 (18:26):
Bank Secrecy Act, and we have to follow that.
Speaker 2 (18:29):
The Bank Secrecy Act went into law in nineteen seventy.
It requires financial institutions to assess the risks the clients
posed to the firm and act accordingly. It also specifically
requires firms to identify and flag activity that could suggest
criminal behavior like drug trafficking, human trafficking, or terrorism financing,
and there are serious consequences for banks that keep such
(18:50):
accounts open.
Speaker 3 (18:52):
But where Mark is right is all these examples where
they put a lot of pressure on us and they
tell us what it's high risk, and if we don't
debank so and then something goes wrong, we can be
one hundred million dollars of fines. So a lot of
banks are kind of guessing like we should get rid
of these people, because we don't get rid of them,
we'll be fined. And you've seen that over and over
and over.
Speaker 2 (19:12):
Yeah, the language and the law is ambiguous in parts,
but also has some specific requirements that mean sometimes we
have to close accounts and we can't give a specific explanation.
It's just incredibly frustrating for clients.
Speaker 3 (19:22):
You probably don't know a lot of people listening to
this podcast. We're not allowed to tell you why we
debanked you. So if we think there's a risk of fraud,
we think there's a risk of money laundering. If we
don't debank you, we'll get in big trouble. There's even
a chance that they might be stepping over the line.
But you know what if someone who's innocent and then
five years later they're proven guilty, it can cost us
on hundred million of dollars. I think we should be
(19:43):
allowed to tell you, and I think when we report stuff,
the federal government should probably know about it. And there's
been far cleaner lines about what we have to do
and we don't have to do or things like that.
So we've been complaining about this for years. We need
to fix it, but it wasn't full the things that
Joe Rogan and Mark Andries spoke about.
Speaker 2 (20:00):
I think what I hear you saying is we and
other banks comply with the law, but the law is
not entirely perfect, and there are ways to reform it
and make it better.
Speaker 3 (20:07):
We have to apply with the law, but it's ambiguous
and we're punished if we make a mistake in our
judgment in either direction. In either direction, and our judgment
can't be perfect because we simply don't know for.
Speaker 2 (20:19):
All its flaws. Why is the Bank Secrecy Act important
and why is a bank's role in preventing crimes so critical.
Speaker 3 (20:25):
We are guardians of the financial system. All your businesses
have an interest in keeping the American system safe, and
that means the Anti money Learning, Know your Customer Bank
Secrecy Act. We don't want to facilitate bad actors. We
don't want to help people who are doing sex trafficking
or terrorism financing. So that is our job. We agree
with that whole concept. The other thing is banks have
(20:46):
to make risk judgments and think of risk judgments around
a business. We need to make judgment calls. That's not
the same thing as the Bank Secrecy Act, but it's
a judgment call. There are certain industries we may think
are risky than other people, and vice or versus so
the system. I mean, there are a lot of banks
out there, bank a lot of different people, but we
need to make proper judgment calls. J.P Morgan himself said he
(21:07):
would lend not all the money in the world on gold,
but on the character of the individual that comes first.
Speaker 2 (21:13):
That's why I love working with small business owners and entrepreneurs,
particularly because of the positive impact they have not just
on themselves but on their communities and indeed on the
whole country. So let's talk about the country for a second.
You talk a lot about how business is a force
for good for the country and how government is only
sometimes a force for good for the country. What would
you like to see from government and its partnership with
(21:36):
business over the next few years. And we have a
change in administration, but that's a moment in time. What
structurally would you like to see change?
Speaker 3 (21:43):
So when we say business is a force for good, eighty percent
of old jobs come from business. And remember even the
jobs and not in business, the military, fireman, police, teachers,
who old in high regard. It's paid for by the economy. Okay,
our national power, our economic power creates our military power,
is what drives all this. We should never forget that.
It doesn't mean businesses don't make mistake. Sometimes businesses go
(22:06):
into Washington, DC and state capitals and they're very selfish
about what they want and how they want it. But
that's what drives it all. It drives jobs, it drives healthcare,
it drives big business, small business symbiotics. So when you
talk about what Washington can do, you know, America is
the greatest country in the planet. I think some of
the grievances you hear about during politics, for both the
left and the right were true. The bottom twenty percent
(22:27):
of our society didn't get a pay race for twenty years,
and they're dying younger, and a lot of them don't
have health care. We're America. We should have fixed that,
and that went on through democratic Republican administration and stuff
like that. I think that the people of America don't
think government's efficient, and then you know, acknowledge that government
has been quite inefficient. And I think when government's inefficient,
(22:48):
people whose trust in the ability of government to get
things done, and that becomes a real problem. So to
restore that trust, prove your competency. I could probably all
have another whole long list of public can fix about mortgages,
affordable housing, regulations, immigration.
Speaker 2 (23:02):
But you're still long America, very long America.
Speaker 3 (23:05):
I mean, you know, if you haven't travel a lot
around the world, go with me to some of these
countries we do business in. When you come back here,
you will kiss the ground and whenever you read the papers.
We're still deeply respect about the world, our morality, our capability,
our culture. People still want so we need to celebrate
that more and explain to people and explain more to
(23:25):
our own kids who kind of take it all for granted.
Speaker 2 (23:37):
Kathleen, one of the things we love about working with
small businesses is that they really are the engine of
the American economy. I mean, it's two thirds of all
new private sector jobs created, It's forty four percent of USGDP.
It's one of the things that distinguishes the US from
other modern developed economies is the dynamism of our entrepreneurial ecosystem.
I work for a big business, you work with small businesses.
(24:00):
Talk about the synergy that you see between big business
and small business.
Speaker 5 (24:05):
Yeah, it is interesting because I have a very unique
vantage point in that I consult for Fortune one hundred businesses,
so some of the biggest brands in the world, and
then work with thousands of small business owners. And they're
often seen as worlds apart from each other, right, But
there is so much symbiosis, as Jamie was talking about,
they are so related where big business then has this
(24:27):
halo effect on impacting smaller businesses. And I think there's
also a lot to be learned. Like from big business,
you can learn so much. You learn operations, risk management,
hr brand marketing, right and innversly. I think big businesses
can learn a lot from small businesses, how to do
digital performance marketing, how to be agile and nimble, how
(24:51):
to use AI, how to evolve.
Speaker 1 (24:53):
With the time.
Speaker 5 (24:54):
So there is so much shared learning that can happen.
Speaker 2 (24:58):
It Chase. We work really hard to contribute to the
communities that we serve. We provide small business loans, we
build affordable housing. We have a consultant program for small
businesses that many take advantage of, and we're really proud
of those programs and we get great feedback on them.
But actually what we get the best feedback on is
when we support someone else's business just being successful in
the marketplace. When businesses are successful and they grow. I mean,
(25:22):
I can't tell you how many of our clients have
come to us and say, you know, you helped me
be successful. And what I'm so proud of is the
four other businesses that I have helped support that have
gotten up off the ground. We've met businesses who've helped
competitors launch. I mean, it's amazing and done so with gusto.
Speaker 1 (25:39):
Yeah, yeah, yeah, no, it is neat.
Speaker 5 (25:41):
It is collaboration over competition with a lot of small
business owners and they are so desperate for help and
resources because so many the lion's share small business owners
are actually solopreneurs doing it alone, going it alone, feeling
alone in the woods.
Speaker 2 (25:57):
So our clients who either have bankers or consultants assigned
to them, have advisors, and they typically operate as part
of an advice ecosystem that ends up being really important
for small businesses. That typically consists of your lawyer, your accountants,
your CPA accountant whichever you have, your insurance agent, and
your bank is a big part of that. They form
(26:18):
a network of people who help entrepreneurs feel frankly less alone. Yeah,
and we're really proud to be part of that because
it is lonely.
Speaker 5 (26:28):
It's one of the hardest things to navigate when you're
starting your business. You're not used to that level of isolation,
especially for people who worked in corporate before and are
used to bigger teams and working with others, you know.
Speaker 1 (26:40):
So, yeah, it fills a gap.
Speaker 2 (26:43):
Let's talk about character a bit. You've done business for
years all over the world, talk about what you look
for in someone you know that you want to do
business with.
Speaker 3 (26:52):
So I do think what causes success in business is
true for small business and for larger companies. I think
it's easier to hide in a larger company. You know,
a small business they don't have the luxury sometimes of
making the mistakes that we can make here or something
like that. So I think we probably attract slightly more
bureaucrats than a small business is because you can't afford
to have someone slows it down. Small businesses are extremely resilient,
(27:13):
very focused in that customer. They want every customer to
walk out that store, that restaurant, that delivery of an
industrial product, feeling great about the customer. And small businesses,
you know, you all notice like sometimes you know, Saturday
Sundays can be disrupted and you got to negotiate with vendors,
you got to negotiate with customers, you got to negotiate
with governments, which is not necessarily true for everyone. In
a big company. A lot of that stuff kind of
(27:34):
gets done for you. But the basic things are always
the basic, which is you got to know the fact,
the detail, the analysis, I mean, really understanding a detailed level.
And if you don't have sony company does that, you
got to have other people to do it. You have
to administer things well. I've seen a lot of people
are kind of a hot mess, and how the minister
always late, things don't get done. That doesn't work. It
doesn't work with your running in a military, a big company,
(27:56):
or you know, a restaurant. And the other thing, which
I think is maybe the most important a couple of things,
is that people want to work for people that they trust.
That doesn't matter whether you or a small business or
a big company. You got to earn that trust every
day from your employees and your customers. I call that heart,
you know. It's like heart and curiosity matter a lot.
You are a lot of people don't talk about in
big companies, but I think it really does matter, and
(28:18):
people know that you actually are trying to do the
best job you can for the company or the client,
the customer, etc. And I'll add a couple other quick
words grit And I know you guys small, but you've
got a lot of grit. You know. I'm sure you
wake up in the morning and you've got to get going.
It doesn't matter how you feel, what's going on at resiliency,
rapid response, all those other things. So it's the whole
(28:38):
basket of things that make people successful.
Speaker 2 (28:41):
We've been blown away by the grit and resilience of
every guest we've had on the show, some of the
stuff they've been through has been incredible. Jamie, thank you
very much for being on the show today. It's been
a pleasure having you.
Speaker 3 (28:50):
Ben. Thank you. It's been pleasure to having you at
the company. I'm thrilled the success of the show, so
thank you.
Speaker 2 (28:56):
Thanks a lot, Kathleen. One of the things that Jamie
talked about was we talked about characteristics that make a
successful business owner and an entrepreneur, and he talked a
lot about grit and resilience, which really has been a
running theme of The Unshakables, and the questions I get
a lot from clients are really about hiring. People are
(29:17):
still telling me, even though it's twenty twenty five, people
are still saying that it's hard to find people.
Speaker 1 (29:23):
Who should I hire?
Speaker 5 (29:24):
Is one of the most asked questions, It really is.
And you can afford to make a mistake because usually
you don't have much money to spend on your first hire.
So the first piece of advice I give is to
do an honest appraisal of what your skills are as
a founder, and then you want to hire for complementary
(29:47):
skill sets. The second piece is they need to be
a revenue or sales driver. They've just got to drive
your bottom line. And so you've got to look for
someone who's going to help you grow the business. And
if someone's mediocre, it doesn't work.
Speaker 2 (30:01):
How do you squeeze out when there's trouble there?
Speaker 5 (30:04):
I love the Sheryl Sandberg question that she asked forever
and ever, which is, walk me through the worst crisis
you ever managed and how you managed it. And so
I like to ask those really tough questions initially, but
at the end of the day, you just got to
get someone in the chair for ninety days before you
(30:26):
even know. So it makes a lot of sense to
hire contractors before full time. Do tempt to perm if
you can, just so you get to see whether they're
able to really operate in a startup small business environment,
because it is different and you've got to be super resourceful,
and if you're not, you're just not going to hack it.
Speaker 2 (30:48):
If something feels off, do you just make the call
real quick and make a change, or do you try
to work it out?
Speaker 1 (30:53):
You trust your gut.
Speaker 5 (30:54):
I love the saying hire slowly, firefast.
Speaker 1 (30:58):
It's like someone's got to go. Then you have to
trust your gut because you don't have time. It's not
on your side. You have a limited runway when you're
running a small business.
Speaker 2 (31:07):
The one I always hear is I fired him too soon,
said no one ever. So that's good talk a little
bit about inflection points in the growth cycle, because one
of the things I've noticed is there's these inflection points
at these key numbers, like your first hire one, and
then actually two is another big milestone, right, and then
there's another one at about ten, and then there's another
(31:30):
sort of one at twenty five.
Speaker 5 (31:31):
I know someone actually who had a rule you would't
hire over thirty, who is like that is the size
of the company that I want to build. I'm not
going to exceed that because there are these profound cultural shifts.
It is something you really need to ask yourself, how
big is big?
Speaker 1 (31:47):
And what do I want to build toward?
Speaker 5 (31:48):
Because you go from being a founder who is very
connected to the business that over time becomes you know,
more and more elevated the more you scale and grow,
and then you have another inflection point where you've got
to ask yourself, am I really the right CEO for
this business, or do I need to bring in someone
(32:09):
who has that skill set?
Speaker 2 (32:11):
That is one hundred percent an issue. And there's really
two kinds of entrepreneurs. There's those who they founded it
to run a company. That's what they always wanted to do,
that's what they do as they build it. And then
there's the kind who were passionate about the thing that
they were doing, but once it gets to a certain
size and it becomes about management, they are not professional managers.
The smart ones, I think, find a different role for
(32:35):
themselves in the company.
Speaker 5 (32:36):
And identifying what sort of founder you are to your point,
I think just to double click on that, like are
you a technical founder? Are you a marketing founder slash
creative founder? Are you more of an operations founder? And
then trying to find that counterpoint for yourself or series
of counterpoints based on knowing what breed of founder you
(32:58):
actually are.
Speaker 2 (32:59):
That's good advice, Kathleen. What one piece of advice do
you have for small business owners as we head into
twenty twenty five.
Speaker 5 (33:06):
What's the worst thing that could happen? Imagine that can
you live with it?
Speaker 1 (33:12):
If you can? Good if you can't fix it?
Speaker 2 (33:16):
Kathleen this has been terrific. I know you'll be joining
us for a few more episodes this season, so really
looking forward to having you on the show again.
Speaker 1 (33:22):
Thanks for having me.
Speaker 2 (33:27):
Thank you once again to Jamie Dimon and to Kathleen
Griffith for joining me. And welcome back to The Unshakeables
Season two. If you know someone who would love the show,
please share it. On the next episode, we'll be taking
a trip back to the nineteen nineties in southern California's
punk scene. Punk was a way of life in Sokel
and a way of dressing. One man was so inspired
(33:49):
by it all that he started making his own shoes
to wear to the shows.
Speaker 4 (33:54):
And I would buy vintage shoes, but they never quite fit.
And on one of these trips to Baha, I saw
a sign that said boot maker and I walked in.
I said, Hey, can you guys make me a pair
of shoes if I give you a quick sketch. They
made me a pair of shoes and that was it.
Speaker 2 (34:12):
I'm Ben Walter and this is The Unshakeables from Chase
for Business and Ruby Studio from iHeartMedia. We'll see you
here again soon.
Ruby.
Speaker 2 (00:07):
Usually on The Unshakeables, we hear about small business owners
stuck between a rock and a hard place, running up
against a make or break situation. Well, moments like that
don't just happen to small business owners. They also happened
to big companies and their CEOs, people running some of
the largest corporations in the country, people like my boss,
Jamie Dimon.
Speaker 3 (00:28):
When I realized I was sitting at my desk, I
didn't realize this to very of the problems I was
going through, the actual trade positions, and my heart fell out.
Speaker 2 (00:38):
There were a series of trades that the London office
of JP Morgan Chase made in twenty eleven and twenty
twelve that would come to be known as the London Whale.
As soon as he found out about them, Jamie knew
he had a problem.
Speaker 3 (00:51):
And I knew at that moment we're going to lose
billions of dollars. I had not expected that.
Speaker 2 (00:56):
It caught me off guard, but instead of panic, instead
of lashing out, he calmly went to break the news
to everyone. And when I say everyone, I mean to
the board, to the media, but most importantly to his
employees at the firm. Whatever was going to happen. Jamie
took responsibility.
Speaker 3 (01:14):
All these bad headlight said, forget all of that, take
a deep breath, don't overreact. We have a couple hundred
thousand people work with this company. More important than that
they serve. As you mentioned at the Times, by four
million small businesses, serve your clients. Ignore the other stuff.
Do a great job your clients and your communities. We're
going to get through this.
Speaker 4 (01:40):
Hi.
Speaker 2 (01:40):
Everyone, it's Ben Walter with a big welcome back. We're
officially kicking off season two of The Unshakeables, and I'm
excited and ready to share some incredible stories with you.
I'm impressed every day by small business owners, and I
can honestly say that this season continues to surprise me.
Just when I think we've heard it all, I speak
with another small business owner that reminds me just how
tenacious and creative you have to be to start and
(02:02):
run a company. I can't wait for you to hear
their stories. But today we're doing something different. Our guest
is not only the CEO of America's largest bank, he's
also a longtime champion of small business and its ability
to lift up communities. My colleagues, and I get to
learn from him every day. I'm thrilled to welcome to
the show my colleague and my boss, Jamie Dimon, the
(02:23):
chairman and CEO of JP Morgan Chase, Welcome to the show.
Speaker 3 (02:26):
Grilled to be here.
Speaker 2 (02:28):
I also have a great co pilot joining me. Kathleen
Griffith is an entrepreneur, author, and founder and CEO of
Build and Grayce & Co. She'll be joining me throughout the season. Kathleen,
Welcome to the Unshakeables. We're thrilled to have you.
Speaker 1 (02:42):
So glad to be here with you.
Speaker 2 (02:45):
Kathleen, you have so much experience as an entrepreneur and
as a small business owner yourself, so I know you'll
be a great addition to the show today. I'm looking
forward to getting your take on Jamie's insights and advice
ready when you are on today's episode. Chairman of the
board and CEO of JP Morgan Chase, Jamie Dimon. The
(03:05):
theme of our podcast what we talked to small business
owners all the time is colloquially their oh Shit moment.
We talked to them about the time that they really
weren't sure they were going to make it. Have you
had any of those moments running businesses in your career
and can you tell people a little bit about it,
what you learned from it and what you did with it.
Speaker 3 (03:20):
Yeah, people are talking my career and stuff like that.
They almost never mentioned the fact I was fired from
the place I'd worked for for fifteen years. That was
kind of an O shit moment. But you know, listen,
there's some of them are real, like when you make
real mistakes, usually people mistakes. They're hard. Or you do
acquisitions like Bear Sterns in the middle of a crisis.
You're buying a company with thirty thousand people, three hundred
(03:42):
million of assets. You're scared. You have to then execute
all the consolidation, et cetera. That would be one. We
had a big trading problem. It's called the London Whale.
I'm sure when I've died, I'll be You know, you
did a good job, but for the London Whale. But
that to me, yes, that was O shit moment.
Speaker 2 (04:00):
For those of you who don't know, The London Whale
was the name given to a significant loss incurred by
JP Morgan Chase in twenty twelve. A series of investments
made by one trader in the London office had gone bad.
At first, the teams thought it looked like a relatively
standard loss. Very quickly Jamie realized it was much larger.
Speaker 3 (04:20):
The loss was billions, and it could be billions more.
I had not expected that, he caught me off guard.
I immediately told the board, and I went on radio
or TV. I said, we made a terrible mistake, bad
risk management, bad this, bad that, and it's my fault,
and I'm sorry.
Speaker 2 (04:37):
Jamie didn't just own up to the public and the board.
He talked to all the JP Morgan Chase employees.
Speaker 3 (04:43):
I got all the people together inside the company and
I told them this is gonna be terrible. They're going
to accuse us of this with the one bank that
didn't have these proms and now we do, and Diamond
off his white horse and all these bad Headlines I said,
forget all that, because very often what happens, and you
quote have this crisis a company, it makes it worse.
The bosses crying and spilled milk, and everybody's waiting to
(05:03):
see what's going to happen. Meanwhile, our day to day
job didn't change.
Speaker 2 (05:09):
This is something we've heard a lot on the show.
It's not just about what happens, but it's about how
you respond to it that really matters. Jamie told the
press as much. The day after the London whale story broke.
He pulled up to the office around seven am and
the press was already outside, cameras at the ready.
Speaker 3 (05:27):
I walked out. All the cameras can run up to me,
you're gonna lose your job or how much money you're
gonna lose. I looked up at them, I smiled, and
I looked up to Bill and said, if you want
to know something, there are seven thousand people work in
this building, and how proud I am of every single
one of them, and we're gonna do a great job
every day for our clients.
Speaker 2 (05:46):
One of the recurring themes that comes up from every
guest on the show is how deep inside them they
had to reach to get through those moments to really
find the grit and the drive and the energy. Where
do you get yours from?
Speaker 3 (05:58):
I grew up with some basic value, do the best
you can, treat every respect, make the world a better place.
And I literally feel that way when I wake up,
and then when I see our people around the world
what they're doing for their clients and their communities and
their countries. That's where I get my motivation. I feel
being the boss is a responsibility and it's an honor
(06:20):
and it's a privilege. But you owe the people, you
owe the clients, and so I really feel that pressure
to make sure I do a good job. If I don't,
a lot of other people you get hurt.
Speaker 2 (06:30):
We're lucky, as you know, to serve more than six
million small businesses every day, hopefully closing in on seven
million soon. And the last few years have been interesting
because business formation has been at levels we haven't seen
ever in the history of the country. What should small
businesses expect and how should they feel about their contribution
to America in that environment?
Speaker 3 (06:49):
Yeah, so, you know, small businesses have always been a
critical part of the country. They're more than half full
of the jobs, a lot of formation. It's for very
strong economy, it's confidence, all those various things. But also,
I should be playing a small business in big business
a symbiotic. Very often when their plans is built somewhere
for a big factory, three or four times as many
jobs outside of the company, you know, doing small services
(07:12):
and food and engineering and consulting and we're all kind
of grow together each year.
Speaker 2 (07:18):
It's estimated that federal regulations cost small businesses around fourteen
seven hundred dollars per employee. That's twenty percent higher than
for larger businesses. Small businesses tell us that they feel
the weight of regulation, and they feel the weight of
all these changes on them, and sometimes they feel like
they don't have a voice. How do we give them
a bigger voice?
Speaker 3 (07:40):
We all go in these bus trips together and we
always have lunches and dinners with a lot of small
business people. You hear about the regulations, the audits, the local,
the federal, the state audits, how long it takes to
fill out their taxes and get permissions and licenses and permits.
They have a voice, you know. They do have a
voice through chambers around the country so much are actually
quite capable around the SBA. But I think sitting here
(08:03):
with you, Ben, we can help give a better voice
too and get to the government all the things would
do that can help foster, nurture and grow small businesses.
Speaker 2 (08:12):
Yeah, we try to get them involved and we encourage
them to use their voice and to speak up for
the issues that they're passionate about and to try to
give them a platform. I want to pivot to where
people's heads are at the moment. I've followed the NFIB
Confidence Survey now for the better part of fifteen years.
It's been trekking along at an all time low. Suddenly
spiked to a pretty high level actually after the election.
(08:33):
The NFIB is the National Federation of Independent Businesses, and
they publish something called the Small Business Optimism Index, which
is a metric that shows us how small business owners
are feeling about the state of business in America. Between
November and December of twenty twenty four, I saw that
number jump more than I had ever seen in a
single month.
Speaker 3 (08:53):
I think, whether you're a Democrat or Republican, business actually
feels pretty good about the oncoming pro business environment, pro
investment environment, and things like that.
Speaker 2 (09:04):
But we are still hearing when we survey that rising taxes,
wage costs, inflation, those things continue to weigh on businesses.
And one of the things I've been lucky to learn
from you is about risk management and how to really
think about a risk culture. So what should small businesses
be worried about and what should they do about it?
Speaker 3 (09:20):
In terms of risk management, it doesn't matter what business
you're in. Obviously, every business is different. So if you're
a bank, our biggest risks or interest rates and credit
exposure and things like that. But if you're certain types
of other companies, your biggest exposure might be what's the
cost of oil, what's the cost of energy, what's the
cost of transport, and other areas might just be what's
the cost of wages or something like that. So I
(09:41):
think every business should prepare and think through a wide
range of potential pros and cons slower growth, higher costs,
so they can handle it. Because survival is half the
name of the game. You could talk to anyone out there,
from big companies to smaller companies. If you can get
through tough times, then you can really do quite well
in good times and sure a better workforce and make
(10:01):
different types of investments. That the economy is kind of
like the weather. No matter what you think it is today,
it may not be sunny tomorrow, and so you need
to be prepared for that. So we just have very
blunt open conversations. Can you handle this, What does it
mean to you? How are you going to do it?
So you're basically prepared. You're thinking through what a plan
might be, how you might deal with it. It also
very often stops you from overexpanding. People get exuberant and
(10:23):
you know, over expanding. All of a sudden you have
a downturn. Now you have a lot more overhead or
something like that. So just being prepared, thinking through, having
an honest assessment, always think about what can go wrong
to not just about the things that can go right,
and you get better and smart as you go on.
Speaker 2 (10:38):
So how do you lead a team through that when
you see the bumps in the road coming, when you
see the downturn coming, how do you convince people that
work for you to persevere through that.
Speaker 3 (10:48):
First of all, we're totally honest with everybody. The things
that we say publicly privately right about that you hear
in the management meetings is the same stuff. You should
always celebrate your positive you should always celebrate your wins,
but every now and then to sit down, emphasize what
you're not doing well and that sometimes there are bad
times out there. So you've got to be a little prepared, And.
Speaker 2 (11:07):
How do you develop the judgment for you know, things
are changing, maybe they're getting worse, maybe they're getting better. Nope,
I'm gonna stick with my plan and I'm going to
power through. Or it's time to think differently, it's time
to stop, turn look and rethink things.
Speaker 3 (11:19):
Well, I think there's a bunch of things here. So
when it comes to growing and investing and expanding, I
try to run a business that we don't worry about
the weather. I don't want you to change those plans.
I do think you have to take a very deep
look at yourself. Sometimes I don't care if you're a
big company or a small company. Sometimes you're slowing down,
the weeds are growing, Bureaucracy builds in you and your job.
(11:40):
Ben you have to deal with risk, legal, credit, compliance, audit,
finance from the big corporate headquarters who's making demands on you.
They may not necessarily fully understand what those demands are,
and so it's always important to like refresh it, rethink
it through, be honest, criticize yourself. And we've had if
you look at it, we've had a good time for
it a long time. We have not had a real downturn.
(12:02):
COVID had this you know, momentary downturn, but we haven't
had a downturn for a long time.
Speaker 2 (12:08):
One of the things I tell people. I started my
career in the mid nineties, and we actually haven't had
a normal I'm gonna call it a normal garden variety
recession in my entire career. We've had crises and good
times and nothing in between. Right, people have forgotten about
the normal business cycle.
Speaker 3 (12:21):
I feel like that's correct. Yeah, you had so you
lived through the Internet bubble that was kind of temporary
because this docks went up, they came down. You lived
to the Great Financial Crisis. That absolutely is not a
normal thing. But you're right, we have not had a
normal garden variety recession in quite a long time. And
it's not just a recession. You might have things that
you don't expect, like interest rates going up in a recession,
(12:41):
inflation not going down the way you'd expect it. And
you see that today where you know, all of a sudden,
people saying, wait, inflation's not going away so quickly, and
the Fed's gonna have to adjust. You always have to
be prepared for things that you don't expect, and you
always want to bank in your corner that's going to
be there for you through good times and bad times.
Speaker 2 (13:00):
Kathleen, I think this would be a good time to
get your take. A lot of that conversation focused on
risk and managing risk and having a culture of risk
in a business. So I'm curious, from your perspective, as
someone who has started businesses and who works with small businesses,
how do you tell them to think about risk.
Speaker 5 (13:17):
For a lot of small business owners, it's seen as
an expensive luxury. It's boring and not something they think
they can afford to do right now. You know, they're
just kind of running fast with super sharp scissors. But
as Jamie talked about in this episode, there are as
many types of risks as there are types of businesses,
(13:37):
everything from labor to lawsuits, to competitors to cybersecurity, to
supply chain, to cash flow to cost of goods. The
list goes on, and so you really need to first
and foremost identify what those risks are for you as
a small business owner. For me, the biggest risk is
(13:58):
exposure and liability. So I put three things into place
early in my business so I could sleep through the night.
The first was just setting up a business that's protected
the formation.
Speaker 1 (14:09):
Of the company.
Speaker 5 (14:10):
The second was making sure that I had liability insurance
in place and all my exposure points were covered, and
the third was really just managing contracts and agreements, making
sure that those were ironclad, and paying for really good
lawyers even before I could afford them.
Speaker 2 (14:30):
One of the things that people like me who work
for big companies have the advantage of. Even as CEO
of Chase for Business, I have a team that's designed
to challenge me. It's designed to say, hey, Ben, did
you think about this? Or what if this happens? But
in a small company where it might be just you
or you and a few people, how do you facilitate
that sort of cognitive challenge? How do you make sure
(14:52):
that there's somebody who's thinking about the other side of
the trade right?
Speaker 5 (14:56):
The most important thing I would say is just to
really focus on on owning that as a founder yourself,
so you don't really have anyone to delegate to. You've
got to be on your front foot thinking through everything
that can possibly go wrong in your business.
Speaker 1 (15:12):
So it really is a lot of trial and error.
You learn by making.
Speaker 5 (15:16):
Mistakes, a lot of them are costly, and you decide
you're not going to do that again.
Speaker 2 (15:21):
One of the other things I want to talk about
is the business cycle. I mentioned this to Jamie because
I think about this a lot, particularly from a bank perspective.
We haven't really had a normal business cycle. We had
the dot com bubble, and then we had the Great
Financial Crisis, and then we had COVID. These were sort
of headline type, you know, the world is melting down
kind of things, as opposed to we had growth, and
(15:45):
then we had a recession, and then things got better
and we had growth again.
Speaker 5 (15:48):
How do you think that small businesses should prepare for that?
Speaker 2 (15:52):
My view is there's no real way to prepare for
something like COVID, where some businesses had, you know, an
eighty five or ninety percent drop in demand. I just
don't think that's a reason that's such a black Swan event.
But I think you can plan for what if I
lost my largest client, or what if demand in the
aggregate were down fifteen to twenty percent? What would I do?
(16:14):
How would I survive that? When I talk to clients,
I always say plan for the sort of middle of
the Bell curve, not the very extreme ends of the
Bell curve. Not that you can't think about some of
those things, but those kinds of things are what insurance
is for, or for other things because there's no way
you'd have the financial wherewithal to stomach it.
Speaker 5 (16:31):
Yeah, and I liked a lot what Jamie was saying
about people get over exuberant and so over expand and
so really taking a step back and assessing your business
periodically to make some you know, strategic changes to make
sure that we're prepared for changing times.
Speaker 3 (16:49):
Yeah.
Speaker 2 (16:50):
The other advice I have for small business owners with
respect to this is you can have too much of
a good thing. And I don't know what that good
thing is. It's different for every business. But whenever something
is going really well and just constantly, constantly going really well,
over and over and over again, that should also make
your antenna go.
Speaker 5 (17:07):
Up right, and so you may have the sense that
you've got a really healthy business. We hear all the
time when you get under the hood of the car
and you're asking about allocation, someone saying, well, eighty percent
of my business is coming from this one retailer.
Speaker 1 (17:20):
Yeah, what if they go under, You're out of business.
Speaker 2 (17:24):
Okay, let's get back to Jamie. Jamie and I had
a wide ranging discussion about risk, and we ended up
talking about one of the specific types of risk that
we have to manage at JP Morgan Chase. A few
weeks ago, on Joe Rogan's podcast, Mark Andreesson whos
a prominent venture capitalist, talked about de banking and that's
something you and I have had to deal with, is
some of the myths and truths around that. Can you
(17:46):
talk a little bit about how that works and what
is debanking and how do we think about it here
at JP Morgan Chase.
Speaker 3 (17:52):
Yeah. I called Mark Andreessen after that as your friend
of mine, I want to explain to him we have
not debanked anyone because of political or religious relationships period
Now when we debank so and they often blame that reason,
but that's not a reason. We don't bank marijuana companies
because there's no federal law around it. We simply can't
follow the law. If there's a federal law, we probably would,
(18:15):
and we do bank some crypto companies and very carefully.
We are responsible in the law to fight sex trafficking,
money laundering, tax avoidance.
Speaker 2 (18:24):
It's the Bank Secrecy Act right.
Speaker 3 (18:26):
Bank Secrecy Act, and we have to follow that.
Speaker 2 (18:29):
The Bank Secrecy Act went into law in nineteen seventy.
It requires financial institutions to assess the risks the clients
posed to the firm and act accordingly. It also specifically
requires firms to identify and flag activity that could suggest
criminal behavior like drug trafficking, human trafficking, or terrorism financing,
and there are serious consequences for banks that keep such
(18:50):
accounts open.
Speaker 3 (18:52):
But where Mark is right is all these examples where
they put a lot of pressure on us and they
tell us what it's high risk, and if we don't
debank so and then something goes wrong, we can be
one hundred million dollars of fines. So a lot of
banks are kind of guessing like we should get rid
of these people, because we don't get rid of them,
we'll be fined. And you've seen that over and over
and over.
Speaker 2 (19:12):
Yeah, the language and the law is ambiguous in parts,
but also has some specific requirements that mean sometimes we
have to close accounts and we can't give a specific explanation.
It's just incredibly frustrating for clients.
Speaker 3 (19:22):
You probably don't know a lot of people listening to
this podcast. We're not allowed to tell you why we
debanked you. So if we think there's a risk of fraud,
we think there's a risk of money laundering. If we
don't debank you, we'll get in big trouble. There's even
a chance that they might be stepping over the line.
But you know what if someone who's innocent and then
five years later they're proven guilty, it can cost us
on hundred million of dollars. I think we should be
(19:43):
allowed to tell you, and I think when we report stuff,
the federal government should probably know about it. And there's
been far cleaner lines about what we have to do
and we don't have to do or things like that.
So we've been complaining about this for years. We need
to fix it, but it wasn't full the things that
Joe Rogan and Mark Andries spoke about.
Speaker 2 (20:00):
I think what I hear you saying is we and
other banks comply with the law, but the law is
not entirely perfect, and there are ways to reform it
and make it better.
Speaker 3 (20:07):
We have to apply with the law, but it's ambiguous
and we're punished if we make a mistake in our
judgment in either direction. In either direction, and our judgment
can't be perfect because we simply don't know for.
Speaker 2 (20:19):
All its flaws. Why is the Bank Secrecy Act important
and why is a bank's role in preventing crimes so critical.
Speaker 3 (20:25):
We are guardians of the financial system. All your businesses
have an interest in keeping the American system safe, and
that means the Anti money Learning, Know your Customer Bank
Secrecy Act. We don't want to facilitate bad actors. We
don't want to help people who are doing sex trafficking
or terrorism financing. So that is our job. We agree
with that whole concept. The other thing is banks have
(20:46):
to make risk judgments and think of risk judgments around
a business. We need to make judgment calls. That's not
the same thing as the Bank Secrecy Act, but it's
a judgment call. There are certain industries we may think
are risky than other people, and vice or versus so
the system. I mean, there are a lot of banks
out there, bank a lot of different people, but we
need to make proper judgment calls. J.P Morgan himself said he
(21:07):
would lend not all the money in the world on gold,
but on the character of the individual that comes first.
Speaker 2 (21:13):
That's why I love working with small business owners and entrepreneurs,
particularly because of the positive impact they have not just
on themselves but on their communities and indeed on the
whole country. So let's talk about the country for a second.
You talk a lot about how business is a force
for good for the country and how government is only
sometimes a force for good for the country. What would
you like to see from government and its partnership with
(21:36):
business over the next few years. And we have a
change in administration, but that's a moment in time. What
structurally would you like to see change?
Speaker 3 (21:43):
So when we say business is a force for good, eighty percent
of old jobs come from business. And remember even the
jobs and not in business, the military, fireman, police, teachers,
who old in high regard. It's paid for by the economy. Okay,
our national power, our economic power creates our military power,
is what drives all this. We should never forget that.
It doesn't mean businesses don't make mistake. Sometimes businesses go
(22:06):
into Washington, DC and state capitals and they're very selfish
about what they want and how they want it. But
that's what drives it all. It drives jobs, it drives healthcare,
it drives big business, small business symbiotics. So when you
talk about what Washington can do, you know, America is
the greatest country in the planet. I think some of
the grievances you hear about during politics, for both the
left and the right were true. The bottom twenty percent
(22:27):
of our society didn't get a pay race for twenty years,
and they're dying younger, and a lot of them don't
have health care. We're America. We should have fixed that,
and that went on through democratic Republican administration and stuff
like that. I think that the people of America don't
think government's efficient, and then you know, acknowledge that government
has been quite inefficient. And I think when government's inefficient,
(22:48):
people whose trust in the ability of government to get
things done, and that becomes a real problem. So to
restore that trust, prove your competency. I could probably all
have another whole long list of public can fix about mortgages,
affordable housing, regulations, immigration.
Speaker 2 (23:02):
But you're still long America, very long America.
Speaker 3 (23:05):
I mean, you know, if you haven't travel a lot
around the world, go with me to some of these
countries we do business in. When you come back here,
you will kiss the ground and whenever you read the papers.
We're still deeply respect about the world, our morality, our capability,
our culture. People still want so we need to celebrate
that more and explain to people and explain more to
(23:25):
our own kids who kind of take it all for granted.
Speaker 2 (23:37):
Kathleen, one of the things we love about working with
small businesses is that they really are the engine of
the American economy. I mean, it's two thirds of all
new private sector jobs created, It's forty four percent of USGDP.
It's one of the things that distinguishes the US from
other modern developed economies is the dynamism of our entrepreneurial ecosystem.
I work for a big business, you work with small businesses.
(24:00):
Talk about the synergy that you see between big business
and small business.
Speaker 5 (24:05):
Yeah, it is interesting because I have a very unique
vantage point in that I consult for Fortune one hundred businesses,
so some of the biggest brands in the world, and
then work with thousands of small business owners. And they're
often seen as worlds apart from each other, right, But
there is so much symbiosis, as Jamie was talking about,
they are so related where big business then has this
(24:27):
halo effect on impacting smaller businesses. And I think there's
also a lot to be learned. Like from big business,
you can learn so much. You learn operations, risk management,
hr brand marketing, right and innversly. I think big businesses
can learn a lot from small businesses, how to do
digital performance marketing, how to be agile and nimble, how
(24:51):
to use AI, how to evolve.
Speaker 1 (24:53):
With the time.
Speaker 5 (24:54):
So there is so much shared learning that can happen.
Speaker 2 (24:58):
It Chase. We work really hard to contribute to the
communities that we serve. We provide small business loans, we
build affordable housing. We have a consultant program for small
businesses that many take advantage of, and we're really proud
of those programs and we get great feedback on them.
But actually what we get the best feedback on is
when we support someone else's business just being successful in
the marketplace. When businesses are successful and they grow. I mean,
(25:22):
I can't tell you how many of our clients have
come to us and say, you know, you helped me
be successful. And what I'm so proud of is the
four other businesses that I have helped support that have
gotten up off the ground. We've met businesses who've helped
competitors launch. I mean, it's amazing and done so with gusto.
Speaker 1 (25:39):
Yeah, yeah, yeah, no, it is neat.
Speaker 5 (25:41):
It is collaboration over competition with a lot of small
business owners and they are so desperate for help and
resources because so many the lion's share small business owners
are actually solopreneurs doing it alone, going it alone, feeling
alone in the woods.
Speaker 2 (25:57):
So our clients who either have bankers or consultants assigned
to them, have advisors, and they typically operate as part
of an advice ecosystem that ends up being really important
for small businesses. That typically consists of your lawyer, your accountants,
your CPA accountant whichever you have, your insurance agent, and
your bank is a big part of that. They form
(26:18):
a network of people who help entrepreneurs feel frankly less alone. Yeah,
and we're really proud to be part of that because
it is lonely.
Speaker 5 (26:28):
It's one of the hardest things to navigate when you're
starting your business. You're not used to that level of isolation,
especially for people who worked in corporate before and are
used to bigger teams and working with others, you know.
Speaker 1 (26:40):
So, yeah, it fills a gap.
Speaker 2 (26:43):
Let's talk about character a bit. You've done business for
years all over the world, talk about what you look
for in someone you know that you want to do
business with.
Speaker 3 (26:52):
So I do think what causes success in business is
true for small business and for larger companies. I think
it's easier to hide in a larger company. You know,
a small business they don't have the luxury sometimes of
making the mistakes that we can make here or something
like that. So I think we probably attract slightly more
bureaucrats than a small business is because you can't afford
to have someone slows it down. Small businesses are extremely resilient,
(27:13):
very focused in that customer. They want every customer to
walk out that store, that restaurant, that delivery of an
industrial product, feeling great about the customer. And small businesses,
you know, you all notice like sometimes you know, Saturday
Sundays can be disrupted and you got to negotiate with vendors,
you got to negotiate with customers, you got to negotiate
with governments, which is not necessarily true for everyone. In
a big company. A lot of that stuff kind of
(27:34):
gets done for you. But the basic things are always
the basic, which is you got to know the fact,
the detail, the analysis, I mean, really understanding a detailed level.
And if you don't have sony company does that, you
got to have other people to do it. You have
to administer things well. I've seen a lot of people
are kind of a hot mess, and how the minister
always late, things don't get done. That doesn't work. It
doesn't work with your running in a military, a big company,
(27:56):
or you know, a restaurant. And the other thing, which
I think is maybe the most important a couple of things,
is that people want to work for people that they trust.
That doesn't matter whether you or a small business or
a big company. You got to earn that trust every
day from your employees and your customers. I call that heart,
you know. It's like heart and curiosity matter a lot.
You are a lot of people don't talk about in
big companies, but I think it really does matter, and
(28:18):
people know that you actually are trying to do the
best job you can for the company or the client,
the customer, etc. And I'll add a couple other quick
words grit And I know you guys small, but you've
got a lot of grit. You know. I'm sure you
wake up in the morning and you've got to get going.
It doesn't matter how you feel, what's going on at resiliency,
rapid response, all those other things. So it's the whole
(28:38):
basket of things that make people successful.
Speaker 2 (28:41):
We've been blown away by the grit and resilience of
every guest we've had on the show, some of the
stuff they've been through has been incredible. Jamie, thank you
very much for being on the show today. It's been
a pleasure having you.
Speaker 3 (28:50):
Ben. Thank you. It's been pleasure to having you at
the company. I'm thrilled the success of the show, so
thank you.
Speaker 2 (28:56):
Thanks a lot, Kathleen. One of the things that Jamie
talked about was we talked about characteristics that make a
successful business owner and an entrepreneur, and he talked a
lot about grit and resilience, which really has been a
running theme of The Unshakables, and the questions I get
a lot from clients are really about hiring. People are
(29:17):
still telling me, even though it's twenty twenty five, people
are still saying that it's hard to find people.
Speaker 1 (29:23):
Who should I hire?
Speaker 5 (29:24):
Is one of the most asked questions, It really is.
And you can afford to make a mistake because usually
you don't have much money to spend on your first hire.
So the first piece of advice I give is to
do an honest appraisal of what your skills are as
a founder, and then you want to hire for complementary
(29:47):
skill sets. The second piece is they need to be
a revenue or sales driver. They've just got to drive
your bottom line. And so you've got to look for
someone who's going to help you grow the business. And
if someone's mediocre, it doesn't work.
Speaker 2 (30:01):
How do you squeeze out when there's trouble there?
Speaker 5 (30:04):
I love the Sheryl Sandberg question that she asked forever
and ever, which is, walk me through the worst crisis
you ever managed and how you managed it. And so
I like to ask those really tough questions initially, but
at the end of the day, you just got to
get someone in the chair for ninety days before you
(30:26):
even know. So it makes a lot of sense to
hire contractors before full time. Do tempt to perm if
you can, just so you get to see whether they're
able to really operate in a startup small business environment,
because it is different and you've got to be super resourceful,
and if you're not, you're just not going to hack it.
Speaker 2 (30:48):
If something feels off, do you just make the call
real quick and make a change, or do you try
to work it out?
Speaker 1 (30:53):
You trust your gut.
Speaker 5 (30:54):
I love the saying hire slowly, firefast.
Speaker 1 (30:58):
It's like someone's got to go. Then you have to
trust your gut because you don't have time. It's not
on your side. You have a limited runway when you're
running a small business.
Speaker 2 (31:07):
The one I always hear is I fired him too soon,
said no one ever. So that's good talk a little
bit about inflection points in the growth cycle, because one
of the things I've noticed is there's these inflection points
at these key numbers, like your first hire one, and
then actually two is another big milestone, right, and then
there's another one at about ten, and then there's another
(31:30):
sort of one at twenty five.
Speaker 5 (31:31):
I know someone actually who had a rule you would't
hire over thirty, who is like that is the size
of the company that I want to build. I'm not
going to exceed that because there are these profound cultural shifts.
It is something you really need to ask yourself, how
big is big?
Speaker 1 (31:47):
And what do I want to build toward?
Speaker 5 (31:48):
Because you go from being a founder who is very
connected to the business that over time becomes you know,
more and more elevated the more you scale and grow,
and then you have another inflection point where you've got
to ask yourself, am I really the right CEO for
this business, or do I need to bring in someone
(32:09):
who has that skill set?
Speaker 2 (32:11):
That is one hundred percent an issue. And there's really
two kinds of entrepreneurs. There's those who they founded it
to run a company. That's what they always wanted to do,
that's what they do as they build it. And then
there's the kind who were passionate about the thing that
they were doing, but once it gets to a certain
size and it becomes about management, they are not professional managers.
The smart ones, I think, find a different role for
(32:35):
themselves in the company.
Speaker 5 (32:36):
And identifying what sort of founder you are to your point,
I think just to double click on that, like are
you a technical founder? Are you a marketing founder slash
creative founder? Are you more of an operations founder? And
then trying to find that counterpoint for yourself or series
of counterpoints based on knowing what breed of founder you
(32:58):
actually are.
Speaker 2 (32:59):
That's good advice, Kathleen. What one piece of advice do
you have for small business owners as we head into
twenty twenty five.
Speaker 5 (33:06):
What's the worst thing that could happen? Imagine that can
you live with it?
Speaker 1 (33:12):
If you can? Good if you can't fix it?
Speaker 2 (33:16):
Kathleen this has been terrific. I know you'll be joining
us for a few more episodes this season, so really
looking forward to having you on the show again.
Speaker 1 (33:22):
Thanks for having me.
Speaker 2 (33:27):
Thank you once again to Jamie Dimon and to Kathleen
Griffith for joining me. And welcome back to The Unshakeables
Season two. If you know someone who would love the show,
please share it. On the next episode, we'll be taking
a trip back to the nineteen nineties in southern California's
punk scene. Punk was a way of life in Sokel
and a way of dressing. One man was so inspired
(33:49):
by it all that he started making his own shoes
to wear to the shows.
Speaker 4 (33:54):
And I would buy vintage shoes, but they never quite fit.
And on one of these trips to Baha, I saw
a sign that said boot maker and I walked in.
I said, Hey, can you guys make me a pair
of shoes if I give you a quick sketch. They
made me a pair of shoes and that was it.
Speaker 2 (34:12):
I'm Ben Walter and this is The Unshakeables from Chase
for Business and Ruby Studio from iHeartMedia. We'll see you
here again soon.
Hosts And Creators
Ben Walter
Tanya Nebo
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