News analysis: How JP Morgan's two heads became one
Like Hollywood marriages, partnerships between senior bankers are often short-lived and unhappy affairs in which one party agrees to suppress their ambition for a brief period of time, normally followed by a swift and highly public divorce.
In a world where precedents include the breakups of Stuart Gulliver and John Studzinski at HSBC, and Oswald Grübel and John Mack at Credit Suisse, Bill Winters and Steve Black’s co-headship of JP Morgan’s investment bank stood out as the shining example of what could happen when two people with complementary skills were put to work alongside one another.
From the start the co-chief executive structure proved well-suited to the talents of both men. Black in New York took care of the day-to-day business of being the chief executive of a major Wall Street investment bank, while Winters from his London base travelled the globe dealing with the detail of managing the risk-taking of one of the largest balance sheets in the world.
Black and Winters were helped by the clear delineation of their roles and also the scale of the businesses they were left to run. In Winters' case his responsibilities included a European workforce bigger than the whole of Lehman Brothers and a commercial bank that had mandates such as the financing of the Iraqi government.
Their partnership was also helped by the size of the problems they faced from the outset. While JP Morgan appeared monolithic from the outside, it was actually a patchwork quilt of half integrated businesses left over from various mergers.
That JP Morgan has not chosen to replicate the structure is telling and suggests that while the Black-Winters double act was right for a business in crisis it is not necessarily right for a firm that is now one of the world’s top investment banks.
For those banks that want to emulate JP Morgan’s success with duel heads there are a few lessons: (1) do not base them in the same city, country or continent; (2) make sure they are kept busy; (3) a difference in age of several years is helpful.
-- Write to Harry Wilson at hwilson@efinancialnews.com
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