Ina Drew’s London Whale

October 18th, 2012

If you consider the differences between knowledge and wisdom… you begin to see that one gets you through the day/hour, while the other gets you through life/the situation. Wisdom always adds the benefit of context drawn from experience.  I was reminded of this as I read the New York Times Magazine article of a couple of weeks ago, covering Ina Drew’s rise and fall at JPMorgan Chase.

Drew was very clearly suited for the job.  Or was she?

She was noted for her loyalty to her managers, and to then Chairman, Jamie Dimon, and she engendered loyalty in her team.  She was smart, no-nonsense style, a tough adversary, balanced, ethical and very well respected.  She was a team player, known for sharing information only on a need-to-know basis.  But above all, she had unparalleled experience and was accepted by all as the expert in her position as Chief Investment Officer.  So how is it that all of her experience didn’t give her an understanding of how the silos and human dynamics of two transatlantic teams – Bond Traders in NY and a more sophisticated quant team that was flexing its muscle in London – could wield such a devastating blow to the Bank and her career.

Yes, her knowledge told her what to do and how to do it when her positions were long or short.  But her fall from grace revolved around the intersections of human dynamics. How did she misread the desperation of a silo’d team in London who aspired to heights that ultimately would include her job.  What caused her to trust thin explanations of hedging strategies and mounting risk? We all know that human dynamics are never straight forward. But predictability and caution should come with experience. Surely there are predictable alarms with every ego-driven but thwarted quest for greater recognition and power.  Why didn’t she hear them? How did the overall context of the “London whale” scenario and the wisdom of her experience escape her?

Read the NYTimes article here.

Charlene Simpson
Chief Operating Officer
Consultancy Matters LLC

Category: Articles, Consultancy Matters, Global Banking, Leadership, Learning and Development, Risk Management, Risk Training

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