(MONEY Magazine) – Judging by his machine-gun, thousand-word-a-minute sentences, Jamie Dimon is in an awfully big hurry. If the born and bred New Yorker--chief executive of Chicago's Bank One (ONE) for almost two years now--speaks and moves so quickly that he occasionally frightens his midwestern colleagues, they'll just have to live with it. Because Dimon inherited a company so badly managed and foolishly constructed that if he's got any chance of capturing what he sees as his rightful place among the world's great bankers, he damn well better hurry.

Dimon's odds of restoring Bank One are fiercely debated by an investment community fatigued with financial services mergers that have yet to really pay off. Fans credit the 45-year-old with helping his longtime mentor, Sandy Weill, turn a mediocre Baltimore loan outfit into today's Citigroup, the world's mightiest financial institution. Naysayers sniff that Dimon is capable of little more than subtracting costs. Skulking in the background is his complex relationship with Weill, which went far beyond right-hand man. Weill, now 68, was a second father; Dimon, a son eager to please but also desperate to cast his own shadow. When Weill shocked everyone by booting Dimon from Citigroup in 1998, after the two had come so far, the stage was set for Dimon, whose family name used to be Papademetriou, to star in a Greek drama of his own. The question for a wailing chorus of Bank One shareholders: Will the ending be tragic or heroic?

Bank None

Formed in 1998 from the merger of Banc One and First Chicago NBD (itself the product of a corporate combo just three years earlier), Bank One is the nation's sixth-largest bank, with about $270 billion in assets and 1,800 branches in 14 states. Yet when Dimon arrived in March 2000, it lacked that ultimate '90s cliche, synergy. The places where it dominated were far-flung and random (Illinois, Louisiana, Arizona). The retail banks' computer systems weren't compatible. Bank One's credit-card unit, First USA (now the No. 3 U.S. issuer), was in free fall. Responsible for one-third of Bank One's net income in 1999, First USA lost millions of customers when it jacked up rates on late payers--and watched a $1.1 billion profit turn into a loss by the end of 2000.

The rest of Dimon's to-do list:

1. Fire most of upper management.

2. Replenish middle ranks depleted by post-merger defections and turf wars

3. Reverse the bank's worsening reputation for customer service.

4. Ditto its ranking as the most expensive operator in the business.

So what's happened since Dimon's arrival? Plenty. First, Dimon bought 2 million shares of his new company. Says the man who put $56 million of his own money where his mouth is: "Ownership is a critical thing. Even if you run a retail store, you think, 'Hey, it's my store, my company,' and you run it like it's your own. And I learned that from Sandy."

Then Dimon went after the business like an old-time banker. That means profits count more than revenue, and a solid range of services trumps flavor-of-the-month stuff. His first moves in Chicago included scaling back an auto-leasing unit and bidding farewell to corporate borrowers that wouldn't purchase Bank One's other, more profitable services, such as money management and stock underwriting. Last June he took the most dramatic step yet and closed its online division, WingspanBank.com--launched with $150 million in hoopla but not even close to making a profit.

Today, accountability rules at Bank One in a way it never did before. Each of those 1,800 offices now posts profit and loss statements on the company's intranet, detailing everything from pretax revenue to office-supply expenses. The fact that branch managers are compensated based on their office's profitability rather than on arbitrary sales goals is pure, uncut Dimon.

The man obsesses over spending at the granular level. When a vice president listed the various subscriptions his department kept to see what the world was saying about Bank One (standard operating procedure), Dimon told him, "You're a businessman; pay for your own Wall Street Journal." Pre-Jamie, managers were self-approving expenses up to $50; now, all expenses are eyeballed by superiors. That, plus the self-interest inspired by stock and options compensation, makes folks less likely to, say, pad $10 lunches with $39 bottles of wine.

Dimon has replaced 11 of his top 12 executives (luring two from Citigroup), cut $1.5 billion in operating costs, improved customer service (surveys show satisfaction rates climbing to 80% from 65%) and firmly established that management is responsible for the company's success or failure. Most important, Dimon has shown that he cares by inserting himself into every aspect of the company and trying to transform its culture.

But will all this be enough? Dimon's State of the Union letter to employees last year--3,000 words, written himself--demonstrates that even for the ever-confident new leader, there are no easy (or short) answers.

Who's your daddy?

Everything Dimon is trying to do in Chicago comes straight from the playbook of Sandy Weill. Their relationship is (like all things father-and-son) filled with issues that can never be resolved. As a teenager, Jamie knew Sandy as his dad's friendly but demanding boss at Shearson Haydon Stone, where Theodore Dimon was a stockbroker and Weill--already acquisitive--was CEO. The younger Dimon wrote his college thesis about Weill's acquisition of Shearson and came to work as Weill's assistant in 1982, not long after the firm had been bought out by American Express. Dimon followed his mentor out the door three years later when Weill, convinced that he'd never get the chance to run the show at American Express as its CEO, quit as president of AmEx. "Sandy wasn't sure what he wanted to do next," Dimon recalls. "We explored everything. We were open for opportunity and looking for something, and Baltimore came along and that was a good enough platform and he went for it. It wasn't an ambitious plan at all. It was just: 'Get the platform, and we'll figure it out from there.'"

"Baltimore" was a little lender called Commercial Credit that Weill, with Dimon at his side, bought in 1986. In the same way that he'd taken advantage of instability in the brokerage world to build his own small firm into a powerhouse, Weill leveraged the turmoil of the era to acquire big-name financial services companies on the cheap: Primerica (which owned Smith Barney), Travelers, Salomon Bros. and, eventually, miraculously, Citicorp. Dimon was the point man on these deals, touring the conquered territories and whipping them back into shape.

Citigroup was to be their crowning achievement. Dimon, then just 42, appeared poised to succeed Weill and John Reed, the two aging lions who'd be co-CEOs. Despite the equal titles, Weill ran the place. During the post-merger confusion (inevitable when combining companies that employ nearly 200,000 people), Weill blamed integration problems on the complicated power structure. The street fighter Weill was pushing the genteel Reed to the curb--clearing the path, it seemed, for Dimon to one day take over.

Not so fast

But when the Citicorp/Travelers merger was announced in April 1998, Dimon was not on the Citigroup board. Instead, he was still occupied with the integration of Travelers' Smith Barney with Salomon. That put him in the hot seat when Salomon incurred $1.3 billion in trading losses from a Russian credit default and the related collapse of a hedge fund called Long Term Capital Management. He was also embroiled in delicate employment issues with Weill's son and daughter, both high-producing managers at the company (and friends of his since high school). Dimon refused to put Weill's daughter, Jessica Bibliowicz, in charge of Travelers' asset management business and wouldn't turn over Salomon's bond operations to son Marc Weill (who later left the company amid a struggle with cocaine addiction). The tension became impossible: On Nov. 1, 1998, Weill told Dimon to resign.

I ask him if it was painful. We look out at the peerless Chicago skyline from the 39th floor of Bank One's headquarters building. Lake Michigan shimmers below. It's the first quiet moment of the interview. "It was a surprise," he says. "And yes, it was hard, because that company was my baby, my family."

Dimon will tell you that he came to Bank One because of "the opportunity," the chance to unlock the value of a set of mismatched but potent properties. He'll say that he turned down top jobs at Amazon.com and other hot shops back then because banking is in his blood. Yet to any observer with even a casual sense of drama, it's clear that Dimon longs not only to lead Bank One to greatness but to prove something. He needs to show Sandy Weill and the world just how much credit Citigroup's success owes to him.

When asked what manager he admires most, how he put together his philosophy of unlocking value and allowing good companies to be good companies, he doesn't hesitate. "Sandy Weill," he says. "Sandy always did it that way." Just like Weill did 16 years ago, Dimon spent a year in the corporate cold, seeking his next platform. "I just took out that old white pad: Maybe I want to be an investor. Maybe I want to be a teacher. Maybe I want to write books. Maybe I want to stay home and be with my kids when they're growing up. I thought about all of that, and I was very open-minded about it, and what I came to is: My craft is financial services. Right or wrong, that's what I know, and I'm pretty good at it."

Good, yes. But good enough?

Bank One's stock traded at about $37.50 in mid-December, up nearly 35% from the $28 low it touched in the days following Sept. 11's terrorist attacks. Third-quarter earnings of 64[cents] a share beat consensus estimates by 2[cents]--not a bad trick a month after America's worst day since Antietam.

In the aftermath, Bank One has been smacked by the struggles of its core business customers--especially manufacturers--and credit-card holders who are both defaulting more regularly and simply not spending as much. Bank One is not global enough to compete in Citigroup's league and not small enough to play Joe's Bank, just hoping that local homeowners meet their mortgages. Still, Dimon has ambitious plans in these rough times. He's spending up to $400 million to finally convert the retail banks to a compatible computer system. He's also dropping $100 million to rehabilitate First USA, including a plan to splash Bank One's name on 29 million First USA-branded cards. And in late November, Dimon bucked the pink-slip trend by hiring 600 info-tech professionals to upgrade his customer service system.

But does Bank One really have the goods to grow? Sean Ryan, a bank analyst for Fulcrum Global Partners who's known for unusually harsh (he prefers "unbiased") ratings, slapped a "sell" on Bank One's stock in July, when it was last at around $37. "First USA has significantly improved," he says, "yet it has simply gone from awful to merely bad."

Dimon disputes such characterizations, though he concedes that trimming expenses is not enough: "Cutting the costs kind of gives you a margin for error. It doesn't mean you're going to run a good business, right? You can't run a good company by cost."

The pre-Sept. 11 economy was already exposing worsening problems in Bank One's loan portfolio--"maybe more than he expected when he came in," says Lisa Welch, a bank analyst at John Hancock Funds. She likes the company's prospects, however, and believes that investors should exercise patience while Dimon gets his team to work. "It can't be done overnight."

Time is not a luxury this company can afford, as Dimon himself acknowledges. The urge to merge, after all, still drives today's banking world. "I get a little bit frustrated sometimes, and I want to move fast," he says. "We have a great management, but it takes a while before it's really functioning well. I'm comfortable that we will be in a position to determine our own destiny."

Strangely, the attack on America may prove a turning point. With a ruthless cost-cutter at the helm who has already tackled a troubled credit portfolio, Bank One has a jump on competitors who are only now turning their attention to uncollectible accounts. Dimon himself lost several friends in the disaster and sent out emotional, personally written missives to his work force. The heartfelt reactions during those first few days, says one source, "brought Bank One folks together because they saw Jamie in a real leadership role."

Dimon's appealing manner and previous star status have made Bank One the kind of cult stock that is often pressured to justify its higher valuations. (Its P/E is 13.6, based on estimated 2002 earnings, compared with 12.3 for the average bank stock.) But questions of style are hardly irrelevant, even to the most bottom-line-sensitive investor. Legg Mason Value Trust manager Bill Miller, a man not easily swayed by rhetoric from Mahogany Row, fervently believes in Jamie Dimon. Indeed, his fund owned 1.1% of Bank One's shares outstanding as of Sept. 30. Says Miller: "He knows exactly what the problems are and what he wants to do."

One example of the Dimon effect: The bank saw zero-percent growth in its $87.5 billion in retail deposits from Q3 2000 to Q3 2001, yet net income from the division climbed 24%--from $251 million to $310 million. Meanwhile, sales of investment products were up 20% to just over $1 billion in revenues.

Even if Dimon is more a cost-cutter than an operator, the stock probably provides more opportunities than risks. Bank One has established franchises in retail banking and commercial lending, a credit-card cash cow that's not yet ready to be put out to pasture, and a strong new team calling the shots. Dimon has his millions on the line, a big score to settle and a legacy to create. This Greek drama may not be a tragedy after all.

--KEN KURSON WITH JEFF NASH