The repercussions of the massive trading loss at JPMorgan Chase are undoubtedly in the early stages, but there are already important leadership lessons to be learned from the conduct of CEO Jamie Dimon.

Ultimately, leadership is a practice of learning: Leaders must learn in order to stay relevant, and in order to be followed.  While JPMorgan Chase CEO Jamie Dimon has taken some constructive steps, his overall posture indicates a leader who is not inclined to make personal changes.  Dimon’s ability to change will be key to his recovery, and to that of the company. 

These four quotes, from a single news report, are full of insights into what Dimon is getting right and wrong.

“This should never have happened.”

From the outset of this crisis, Dimon has clearly acknowledged the existence of a problem – unlike many leaders who skirt the issue or speak in euphemistic language about the severity of the situation.  Dimon gets full marks for his candor.

“I can't justify it.”

This statement is a little wobbly. JPMorgan Chase, as a company and as a culture, either encouraged or discouraged the kinds of actions that led to this loss. There’s not a middle ground. If the trading scheme had resulted in a $2 billion gain, Dimon would say, “This is exactly the behavior we encourage.”  A stronger statement on justification would be something along the lines of, “We have never encouraged this kind of behavior…” 

It may emerge, however, that the so-called London Whale was going against company policy. But it's also possible that the structure and culture of JPMorgan was in a sense 'designed' to produce this outcome, encouraging, openly or not, recklessness and risktaking. In that case, JPMorgan may have been handed a result that its structure and culture were destined to produce. Remember, it is not always a question of a bad apple spoiling the barrel. Sometimes you’ve got a bad barrel-maker. 

“All corrective action will be taken as necessary.”

Dimon made this statement as part of the explanation of the termination of a senior executive with responsibility for the Chief Investment Office, where the trades in question took place. Dimon further announced that his former colleague “served the firm for more than 30 years and has been a great partner.  But it's important that we bring in new management" [italics added.]

Clearly, Dimon sees the need for “corrective action” because of the behavior of others, and not because of his own actions, or lack thereof.  This kind of CEO finger-pointing is rarely useful unless it is surrounded by statements of the many ways in which the CEO is learning from this experience.  We see little evidence of such self-awareness when Dimon utters the next quote, below.

“The buck always stops with me.”

This particularly ill-timed quote followed a meeting that awarded Dimon $23 million in salary and bonuses for a year in which the company earned record income, but during which its stock dropped 22 percent.

“The buck stops with me” is hackneyed and inappropriate, especially when Dimon suffers no financial consequences.  Consider how much more powerful it would be to the public campaign of recovering from this event were Dimon to have said, “In light of this embarrassing result, I am refusing my 2011 bonus.  No one who works at JPMorgan Chase should doubt that we reward performance, not recklessness.  We are the caretakers of our stakeholders’ investments, and everyone should always know this is our first responsibility.  I hold myself to this high standard and expect it from all my colleagues, no exceptions.  We do not reward loss.” 

That’s the sound of the buck stopping.

One of the profound disappointments of global leaders is the habit of extreme self-enrichment after periods of poor performance – and the feeling that those in power don’t (or can’t) even understand the absurdity of the dynamic.  Dimon has an opportunity to change this pattern. 

While announcements may yet be made that reflect JPMorgan’s commitment to changing its behavior, the first person to demonstrate change must be Dimon.  Given the track-record of many corporate leaders to humbly learn what they do not know, the signs are not encouraging.