Summary
1. Talent: Assets #1 in the industry, but not its Talent Portfolio; and, 2. Client Segmentation: Sufficient modeling for the good times, lethal during challenging times.
Analysis
Organizational Decision Quality: I truly believe this is the oxygen for the organizational corpus! This article reminds us that WaMu’s downfall was widely anticipated. Interesting!
+ What were WaMu’s thoughts on this “anticipated downfall” before they fell?
+ How did WaMu get into this position?
+ Why didn’t JPMorgan Chase take the same downfall? (In one word: Dimon – An excellent leader!)
This is a complicated situation. Let’s boil it down to two foundational, but far-reaching business savvy principles:
1. Decision Quality and Talent: Did the best, brightest and hardest working leaders pursue careers at WaMu at the “C”, “V” and management levels? During the “good times” in which most Jell-O sticks to the walls, the industry-wide success typically helps those organizations that sacrifice quality in favor of quantity. This includes among many KPI’s, the organization’s talent acquisition; alias, the contributing future determinates of Organizational Decision Quality (i.e. fresh oxygen).
When the wheels began falling off the bus, WaMu needed to rely on its chosen Talent Portfolio (selected and developed during the good times). Their leadership team built its organizational infrastructure including risk structures, response protocols to critical decision making, cost structures, liquidity positions, portfolio mix, etc.
Overall Talent Quality Score: Poor to fail.
2. Decision Quality and Client Segmentation: Every business is susceptible to the cancerous segments of its client portfolio. Thus, it’s absolutely critical to thoroughly understand where and how much cancer you have in your client portfolio. Sophisticated client segmentation modeling that fluidly incorporates your distribution structure is critical. Activity-Based-Costing and Portfolio Risk Indices (based on varying what-if scenarios) should be key drivers in your modeling. WaMu’s “death” ultimately resulted in a cancerous client portfolio.
Overall Client Segmentation Score: Poor to fail.
Further, if you don’t employ and disperse intelligently, what I refer to as “Cancer Surgeons”, the health of your organization, just like WaMu’s, can lead you to the same fate: six feet under. These specialists are comprehensive, broadly skilled performance gurus. They report directly to “C” level leaders, have an open door to the CEO’s office and exchange politically correct protocol for functional, organizational excellence. You can also call them the “anti-yes-people”.
CEO’s – Please demand Performance Excellence so your employees can live a rich life; in and out of your corporate walls.
Appreciatively, Jim Roncevich
