Jamie Dimon and the Red Queen
This year’s letter from Jamie Dimon to JPMorgan Chase shareholders evoked a sense of urgency.
The 66-page missive made wide ranging commentary on everything from the economy to social justice, to competition from Big Tech and China. But time was a theme Dimon returned to again and again — a refrain about the rapid and ceaseless rate of change we face today.
“…we must get faster and be more creative.”
“...we are training our people in machine learning – there simply is no speed fast enough.”
“...we need to adopt AI and cloud as fast as possible.”
“We need to move faster and bolder in how we attack new markets …"
“Leaders must set high standards of performance all the time, at a detailed level and with a real sense of urgency."
“Force urgency and kill complacency."
And the one that stuck with me the most: “Facts, analysis, detail … facts, analysis, detail … repeat. You can never do enough, and it does not end.”
I think a lot of people, and a lot of bank leaders, in particular, can relate to Dimon’s sentiment here.
In an era where technology is changing so rapidly, it can feel like you’re running as fast as you can but never arriving at the destination. Never really getting anywhere.
There is a name for this feeling. It’s called the Red Queen Effect, and it comes from a scene in Lewis Carroll’s Through the Looking-Glass.
In the book, the Red Queen took Alice by the hand and suddenly began running. The pace was frantic, but the Queen prodded Alice to move “Faster! Faster!” Yet, “however fast they went, they never seemed to pass anything. “I wonder if all the things move along with us?” thought poor puzzled Alice."
The Red Queen effect has been observed in many fields. In 2019, a group of scientists found proof of the phenomenon in nature when they discovered that variant strains of viruses would appear in a microbial community for a short time before being replaced by new strains. This was a continual process.
The host organism would develop a defense to the virus and then, just as quickly, the virus would develop a counter defense.
The result was that the viral species will “remain relatively constant over time (staying in the same place) while there is a myriad of constantly changing strains within species (running faster and faster).”
It looks like this:
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It can be easy to feel like this graph looks when you’re a bank leader being hit with relentless waves of customer and stakeholder expectations, especially around technology.
Things move so fast. And they just keep coming.
But what biology teaches us about surviving these interminable battles is simple. The virus-host duos that persist through constant, small evolutions eventually come to see their traits pass on to the next generation.
As Darwin contends, “it is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.
Alice’s intuition was right. No matter how fast you run, all the things are moving along with you. So you have to keep running hard. But, if you do, small advances will start to accrue. And, over time, they’ll compound into meaningful advantages.
*Amber Buker, Director of Insights