Making the Team: A Guide for Managers, Fifth Edition

Chapter 7 Team Decision Making

Pitfalls and Solutions

In the years leading up to JPMorgan Chase’s $2B trading loss, risk managers and senior investment bankers raised concerns that the bank was making increasingly large investments involving complex trades. However, concerns about the dangers were ignored and dismissed. CEO Jamie Dimon approved the risky trades, and this contributed to an atmosphere of disregard. Even though Dimon was renowned for his ability to sense risk, he failed to heed the alarm bells that sounded in April 2012. Instead, Dimon was convinced by Ina Drew, who led the investment office, that the turbulence was manageable. Unfortunately, no one questioned Drew’s conclusion, and, moreover, the operating committee was not ...