A Partnership No More
断交
Such was Jamie Dimon´s status within the financial services industry that the news of his hiring in March 2000 spurred an immediate 20% pop in Bank One´s stock price, subsequently termed the "Jamie premium."
Dimon´s reputation stemmed from his 17 years at Citigroup Inc. and its predecessor companies, where he served as second-in-command and heir apparent to chief executive Sandy Weill. The two became famous at predecessor Travelers Group for their ability to purchase underperforming companies and improve them. They capped off that process with a transforming merger with Citicorp in 1998.
A subsequent fallout with Weill left Dimon with time to mull his career options. Taking the Bank One lab following the departure of that company´s long-time CEO, John B. McCoy, was a major career gamble. Bank One´s myriad problems at the time included severe credit losses, a credit card unit hemorrhaging customers, a failed Internet strategy and a retail franchise languishing from under investment.
But Dimon invested $58 million of his own money in Bank One´s then-seriously devalued stock, rolled up his sleeves and sat to work. He began with a management housecleaning. Three years later, virtually no senior executives remain from the McCoy Buffed. Most of the new team, not surprisingly, hails from Citigroup, although one notable exception was Austin R. Adams, former technology guru at Wachovia Corp.
Another casualty was the "Uncommon Partnership," a slogan used within Bank One during the McCoy era to describe the company´s then-decentralized management and operational style. By granting acquired banks a high degree of autonomy, the Partnership was designed to encourage potential targets to join the Bank One family.
The downside of the Uncommon Partnership was operational inefficiency, which became more manifest as Bank One purchased ever-larger banks in the ´90s. "It was kind of like a medieval map of Europe where the city states did not interact with each other," says analyst Brock Vandervliet, with Lehman Brothers in New York.
In addition to being expensive, this arrangement made it difficult for Bank One to carry out any company-wide product innovation or marketing. A lack of centralized credit controls also caused problems.
Recognizing these handicaps, McCoy began moving as early as 1995 to shift from a geographically based to a line-of-business management system. But all the "merger of equals" politics involved in the 1998 acquisition of First Chicago NBD Corp. delayed much of the systems integration. Until Adams took charge of the integration project in 2001, for example, the company still operated seven different deposit systems.
Dimon and his team have swept away the last of the managerial fiefdoms and finally moved the company to a one-hank model, with corporate-wide marketing and branding. Last year, for example, the credit card unit shed its "First USA" label and became known as Bank One Card Services. The company´s 1,800 branches are currently being refurnished to give them more of a common look.
"I´m not an image fanatic that says we need to be branded in a certain consistent amid exact way everywhere, but there is a standard we should set for ourselves," says executive vice president and retail herb Charles W. Scharf.
Some vestiges of the Uncommon Partnership continue to linger in remote comers of the franchise, however. Scharf recalls visiting a south Chicago suburb last year and discovering some branches closed in the middle of the week—flouting the industry trend of extended hours. The local manager explained that bank branches in that town had always been closed on Wednesday.
"Last time I checked, Wednesday was a normal business day for the public," says Scharf, who quickly changed the out-dated policy.