Newsletter #46 - Jamie Dimon's Fortress Filter

Jamie Dimon's Fortress Filter

In 2006, Wall Street investment banks were leveraged 35 to 1.

The bridge book of Wall Street had ballooned to $450 billion. Everyone was drunk on subprime mortgage profits.

While competitors chased every last dollar of profit, Dimon made his executives run every new idea through one brutal question:

“Would this survive a 1987-style crash and still leave us with a fortress balance sheet?”

That single filter became JPMorgan's North Star.

The 2008 crisis vindicated the entire philosophy.

Citigroup lost $33B in credit losses in Q2 2008 alone. Bank of America lost $9B. Merrill Lynch lost $26B.

While other banks begged for bailouts, JPMorgan went shopping. They bought Bear Stearns for $10 per share (it had traded at $172 the year before). They scooped up Washington Mutual's assets for $1.9 billion after the largest bank failure in U.S. history.

The fortress filter works because it forces brutal honesty. Every shiny new opportunity, every clever financial innovation, every "this time is different" pitch must answer one question:

Can we survive the worst-case scenario?

Every business needs its version of Dimon's question. What's yours?

The Feedback-Type Mismatch

"I wanted coaching, but I got a performance review."

This interaction destroyed six months of trust between a manager and her star performer. The manager thought she was helping him grow. He thought she was putting him on a performance plan.

They were having two completely different conversations.

Psychologists Douglas Stone and Sheila Heen discovered that feedback comes in three distinct flavors:

1. Appreciation: "I see you and value what you did." When missing, people feel invisible. Their late nights and extra effort vanish into the void.
2. Coaching: "Here's how to improve." Without it, skills plateau. The same mistakes happen quarter after quarter.
3. Evaluation: "Here's where you stand." Absent evaluation breeds anxiety. People invent their own performance narratives, usually catastrophic ones.

The mismatch happens when you deliver one flavor but they taste another. You serve appreciation, they hear evaluation. You offer coaching, they feel criticized.

Try this 30-second rescue instead. When you sense that disconnect mid-conversation, stop everything. Deploy this reset:

Manager asks: "What type of feedback did that sound like to you?"

Direct report reflects: "It felt like evaluation."

Manager pivots: "I was aiming for coaching, mind if I reframe with a next-step suggestion?"

Tension defused. Conversation saved.

There are two simple tactics to use so this never happens again:

1. Pre-label your feedback: In 1-on-1 agendas, mark items with (A), (C), or (E). Both parties know exactly what's coming.
2. Ask before you tell: “Would appreciation, coaching, or evaluation be most useful here?"

The most skilled managers match their feedback to what their people actually need in that moment. Remember, the right feedback at the wrong time is still wrong.