Many of us had seen the handwriting on the wall: when there is nothing your boss can tell you that is different than statements released to the press and to the Wall Street markets, then it's time to start reviewing other opportunities. Five years ago, I had started to do that, thinking there would be time enough to leave at the end of the year.
Little did we know that the FDIC had already conducted an auction of Washington Mutual, and that the lucky bidder was JPMorgan Chase. On September 25, 2008, at the end of the day, it came across the wires: the FDIC had seized Washington Mutual. Later that evening, we all hopped on to a teleconference with Jamie Dimon. The next morning, his team was in town to meet with senior management.
Washington Mutual had taken on so much credit and market risk that it sank under the weight of fear and disbelief generated once Lehman Brothers failed earlier in the month. The media continued to grind out stories on which banks were too big to fail, as credit rating agencies, themselves later found to be in disgrace, continued to downgrade Washington Mutual. Depositors started taking their money out of the bank, which led to more of the same. Which led the FDIC to take the actions it did.
Five years later, I see some of the same types of reckless behaviors in large banks. The behavior seems to be unaffected by large fines or the expansion of enterprise risk management functions. When 80-90% of your focus is on task and achievement of corporate goals, then ethical behavior takes a back seat to greed and ambition.
Risk-taking is an essential part of growth. So is doing the right thing.
Tonight some of us are going to lift a glass to a company that had everything we could imagine early in 2000, when it started to grow exponentially. Great people that respected each other and did the right thing. A culture that valued teamwork, innovation and excellence and was not afraid of either growth or change. There are lessons here that can be extrapolated for other companies struggling right now with some of the same challenges.
I am happy to have kept in touch with so many of my Washington Mutual colleagues, pleased to see where they have landed and the differences they are making for other companies now.