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Equally important, leaders get out in the field regularly so as not to lose touch. Anyone in a meeting should feel free to speak his or her mind without fear of offending anyone else. I once heard someone describe the importance of having "at least one truth-teller at the table." Well, if there is just one truth-teller at the table, you're in trouble—everyone should be a truthteller. Setup for Success An effective leader makes sure all the right people are in the room—from legal, systems, and operations to human resources, finance, and risk. It's also necessary to set up the right structure. When tri-heads report to co-heads, all decisions become political—a setup for failure, not success. Morale-Building High morale is developed through fixing problems, dealing directly and honestly with issues, earning respect, and winning. It does not come from overpaying people or delivering sweet talk, which permits the avoidance of hard decision making and fosters passive-aggressive behaviors. Loyalty, Meritocracy and Teamwork While I deeply believe in loyalty, it often is misused. Loyalty should be to the principles for which someone stands and to the institution: Loyalty to an individual frequently is another form of cronyism. Leaders demand a lot from their employees and should be loyal to them— but loyalty and mutual respect are two-way streets. Loyalty to employees does not mean that a manager owes them a particular job. Loyalty to employees means building a healthy, vibrant company; telling them the truth; and giving them meaningful work, training, and opportunities. If employees fall down, we should get them the help they need. Meritocracy and teamwork also are critical but frequently misunderstood. Meritocracy means putting the best person in the job, which promotes a sense of justice in the organization rather than the appearance of cynicism: "here they go again, taking care of their friends." Finally, while teamwork is important and often code for "getting along," equally important is an individual's ability to have the courage to stand alone and do the right thing. Fair Treatment The best leaders treat all people properly and respectfully, from clerks to CEOs. Everyone needs to help everyone else at the company because everyone's collective purpose is to serve clients. When strong leaders consider promoting people, they pick those who are respected and 56 ask themselves, "Would I want to work for him? Would I want my kid to report to her?" Nonetheless, Compensation Does Matter Leaders need to acknowledge those who came before them and helped shape the enterprise—it's not all their own doing. There's a lot of luck involved in anyone's success, and a little humility is important. The overall goal must be to help build a great company—then we can do more for our employees, our customers, and our communities. While I agree that money should not be the primary motivation for leaders, it is not realistic to say that compensation should not count at any level. People have responsibilities to themselves and to their families. They also have a deep sense of "compensation justice," which means they often are upset when they feel they are not fairly compensated against peers both within and outside the company. There are markets for talent, just like products, and a company must pay a reasonable price to compete. The Grey Area of Leadership Big Business Needs Entrepreneurs, Too Humility There are many aspects of the leadership process that are open for interpretation. This grey area contributes to the complexity of the challenges that leaders—and those who govern them—face. I would like to share with you where I stand with regard to a few of these issues. Successful Leaders Are Hard to Find There are examples of individuals who have been thrust, wholly unprepared, into positions of leadership and actually perform well—I think of President Harry Truman, among others. I would submit, however, that relying on luck is a risky proposition. History shows that bad or inexperienced leaders can produce disastrous results. While there are possibly innate and genetic parts of leadership (perhaps broad intelligence and natural energy), other parts are deeply embedded in the internal values of an individual; for example, work ethic, integrity, knowledge, and good judgment. Many leaders have worked their entire lives to get where they are, and while perhaps some achieved their stature through accident or politics, that is not true for most. Anyone on a sports team, in government, or in virtually any other endeavor knows when he or she encounters the rare combination of emotional skill, integrity, and knowledge that makes a leader. Successful Leaders Are Working to Build Something Most leaders I know are working to build something of which they can be proud. They usually work hard, not because they must but because they want to do so. They set high standards because as long as leaders are going to do something, they are going to do the best they can. They believe in things larger than themselves, and the highest obligation is to the team or the organization. Leaders demand loyalty, not to themselves but to the cause for which they stand. The popular perception is that entrepreneurs—those who believe in free enterprise—exist only in small companies and that entrepreneurs in small companies should be free to pursue happiness or monetary gain as appropriate. Free enterprise, entrepreneurship, and the pursuit of happiness also exist in most large enterprises. Without the capacity to innovate, respond to new and rapidly changing markets, and anticipate enormous challenges, large companies would cease to exist. The people who achieve these objectives want to be compensated fairly, just as they would be if they had built a successful start-up. Performance Isn't Always Easy to Judge Managers responsible for businesses must necessarily evaluate individuals along a spectrum of factors. Did these individuals act with integrity? Did they hire and train good people? Did they build the systems and products that will strengthen the company, not just in the current year but in future years? Did they develop real management teams? In essence, are they building something with sustainable, long-term value? Making these determinations requires courage and judgment. One of the reasons I am so proud of our company is because of our great people, our great leaders. These past five years have been a period of turmoil, crisis, and stress for our industry and sometimes for our company. What our people have accomplished during these difficult circumstances has been extraordinary—a testament to the critical importance of strong leaders. Jamie Dimon is president and CEO of JPMorgan Chase. He was named among the world's 100 most influential people by Time magazine four times, appeared on Institutional Investor's Best CEOs list in the All-America Executive Team Survey four consecutive years, and has been named CEO of the Year by Businessweek, Rolling Stone, and Institutional Investor. His article "The Essential Hallmarks of a Good Leader" was first published on LinkedIn.

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