(Bloomberg) — Jamie Dimon has joined the legion of chief executive officers extolling the virtues of small teams.
Echoing a wave of anti-bureaucracy statements by corporate leaders including Amazon.com Inc.’s Andy Jassy and HSBC Holdings Plc’s Georges Elhedery, the JPMorgan Chase & Co. CEO dedicated a portion of his annual shareholders’ letter to the idea that big companies should be organized into tiny units authorized to take action.
Dimon’s argument went beyond the standard reasons of speed, agility or a flatter management structure. Teams tasked with innovation, he suggested, should be tightly sized to match the tight focus required of them.
“The real competitive battles are fought at the detailed segment level,” he wrote. “It’s not just investment banking or the investment banking health-care sector; it’s having the right team to win in health-care pharma or medical devices. It’s not just credit card or even affluent brands; it’s the Chase Sapphire card.”
Sprawling bureaucracy doesn’t naturally lend itself to that degree of focus, so it needs to be constantly kept at bay, he said. The tactic he recommends: creating tiny teams devoted to the task at hand.
“Very often when a management team wants to accomplish something new, like create a digital account opening process that cuts across virtually every area, everyone on the team says, ‘we’ll get it done,’ meaning they will add it to the long list of tasks already on their plate,” he wrote. “But when efforts are 1% of a lot of people’s jobs, it will never get done. You need a team 100% dedicated to the mission — and everyone else supports them.”
Support for teams comes in the form of centralized systems, like data platforms or artificial intelligence tools. These resources “need to be companywide and easily deployed, which may mean they are necessarily large,” Dimon noted. If there’s consensus on which systems to invest in, Dimon wrote, they’re likely to be “reusable and highly efficient,” reducing the risk that they become artifacts of bureaucratic bloat.
