Always look at the competition. Always assess the landscape.
Keep growing. Obviously, you want to spend efficiently. Good expense is that new branch, that new banker, that new piece of technology. I just got more and more responsibilities. I picked up technology.
By the time we bought Primerica, I oversaw most of corporate, HR, finance and risk functions. Not the big ones: they reported to Sandy. But then I became chief operating officer of Smith Barney. At the same time, I was president and chief operating officer of Primerica, so I just kept accumulating responsibilities. I knew I could run companies. I was already doing that. I loved what I was doing. Bob Lipp [a former senior executive at Chemical Bank, Citi and Travelers] became a great partner of mine, as a friend, as a person and as a great manager.
I just learned a tremendous amount from Bob. I learn a lot from watching other people, how they lead and how they analyze a problem and manage situations. There are others who move as far away as they can from a problem lest they be tainted. He shows you can be a very tough-minded person and still be a gentleman. I am disciplined around facts, people, analytics, details, reporting, get back to me, follow up. What he taught me was to get in the field, go to the sales meetings. But they should. You are assessing what you do.
Being a CEO is not just the numbers. You are trying to assess your results, your performance. Remember my dad was a stockbroker. And then the same thing in People would say that can never happen again. Listen: these things happen. Some are predictable and some are not. You are going to have cycles. But you also can have financial services companies blowing up and you have to be prepared.
So that was part of it. Get the details, do the analysis, know the facts. What does it all mean? For me, a fortress balance sheet is all about capital, liquidity and really understanding the company and being prepared. It also means having sufficient diversity so that even if a portion of your earnings go down, you will still be fine. We are not a diversified conglomerate. All our businesses feed each other. And then there are businesses where earnings are more volatile. But parts of the investment banking business have very steady returns. Now look at the regulations. But if you look back at the firms that blew up in the financial crisis, a lot of them were monolines: monoline insurance companies, monoline investment banks, monoline mortgage companies.
But there is also a danger in becoming too complex. One of my disagreements with Sandy about Citi was that we were too big and too complex in a number of totally unrelated businesses. At Travelers, we were very successful: the stock went up 10 times, we bought businesses and ran them well. But what did Commercial Credit have to do with property and casualty insurance?
When we merged with Citi, my instinct was to bring more focus to the business. Citi was big enough by then to focus on global consumer, global corporate, global asset management and those kinds of areas where you have huge synergies and diversification at the same time. Which is what we have at JPMorgan today. At JPMorgan Chase we are not a financial supermarket.
There is nothing we do that does not also help other parts of the company. But his idea of the financial supermarket was to be in truck leasing, consumer finance, global investment banking, life insurance, property and casualty. I would not agree with something like that.
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We are not complex because we want to be. We keep it as simple as possible, but we operate in complex markets.
Most of us who have been around the block would rather have a well-run business even with a second-rate strategy, than a poorly run business with the most visionary and brilliant strategy. There are so many ways in which companies can be poorly run. Some are too political. Some lack discipline altogether.
Some get arrogant, they actually think they are the best in the world. Complacency is a killer. I remind our people constantly about the rebirth of competition: new challengers crop up in each business we are in.
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How can you avoid complacency? And we are disciplined. We pound the table on it. We review, review, review. We expect people to criticize themselves. But we all worry about the risk of complacency.
We talk about it a lot, in every town hall. We sent a plane load of our people to China to see their leading companies. They came back motivated: a little scared, but motivated to do more and quicker. How many times have I been through it, seen companies blow up and terrible things happen or the competition eat your lunch.