(FORTUNE Magazine) – It's showtime at the gargantuan, glass-framed McCormick Plaza in Chicago. En route to the stage, Jamie Dimon, the 46-year-old CEO of Bank One, gets ambushed by rowdy revelers squirting foamy strands of Silly String. Can in hand, Dimon fires a gooey salvo to rebuff his attackers, then strides to the podium to the thumping pulse of Steppenwolf's "Born to Be Wild." It's the kind of rank-and-file crowd he owns, a conga-line prancing, Hawaiian lei-sporting, banner-shaking sea of systems analysts, loan officers, and branch managers.

"What do I think of our competitors?" Dimon shouts by way of intro. A slim, handsome 6-footer with iron-gray hair, Dimon yanks off his turquoise tie and chops the air like a karate master. "I hate them! I want them to bleed!"

Then, in what seems to be a masterful tonal switch, he turns from pep-rally arrogance to locker-room inspiration. "Winning isn't about patents or your IQ or where you went to school," he says, punching out the clauses in his staccato Queens accent. "It's about one thing--how much you want it!" The crowd is his.

Spend a week, a day, or even a good hour with Jamie Dimon alongside his troops and you realize, yes, the crowd belongs to him. The bond is palpable, and typically long-lasting. But it isn't just his natural showmanship that employees respond to. There is something else entirely--and that's what lies at the heart of this study in leadership. In a business climate plagued by accounting scandals and insider malfeasance, Dimon is an antidote--a back-to-basics, in-the-trenches manager who cares little for grand five-year plans or big mission statements. ("I'd rather have a first-rate execution and second-rate strategy anytime than a brilliant idea and mediocre management," Dimon growls.) Though he is a brutally tough businessman and unforgiving of failure, he is--to his fiber, it seems--intolerant of funny numbers and fudging. If he gets so much as a whiff of that, say dozens of peers and disciples, he's likely to erupt in fury. In other words, he is the right CEO for a very wrong time in corporate America.

That's not to say Dimon is a saint. He is, in fact, an insanely demanding, emotional manager who often drives his troops crazy. Yet if it's important to investigate what works in the executive suite along with what's clearly broken, then the man from Bank One is one for the textbooks. As Arthur Levitt, the crusading former chairman of the SEC, puts it, "Jamie Dimon is the un-Enron."

Since joining the troubled Midwestern financial giant at the peak of the bull market lunacy in early 2000, and before as the partner of Sandy Weill (the mentor who would later fire him at Citigroup), Dimon has been pounding the same sober message like a jackhammer. His letter in Bank One's 2000 annual report--a manifesto for rock-ribbed financial management that looked quaint at the time--so impressed Warren Buffett that the Shakespeare of the genre wrote Dimon calling it "just about the best I've ever witnessed."

More remarkable still is the otherworldly effect Dimon's articles of faith have had on one of the unholiest messes in regional banking. In two short but intense years, this CEO has managed to set in motion a dramatic turnaround. Dimon has pared expenses at the company, which is the Midwest's largest bank and America's third-biggest issuer of credit cards, by an astounding 16.6%, or $1.8 billion. That has cushioned Bank One from big loan losses that could have pushed it into bankruptcy. The company is now solidly profitable. Under Dimon it earned $2.6 billion last year, compared with a $511 million loss in 2000. Since he arrived, ONE's share price has jumped 34% to $38, adding $15 billion in market value and beating the BKX bank index gain of 3%.

Consider the context for that transformation. Bank One is the product of a $29 billion 1998 merger between the old Banc One of Columbus, Ohio, a big retail outfit in the Midwest and Southwest, and First Chicago NBD, a venerable corporate bank with a long tradition of lending to medium-sized manufacturers. The deal posed the classic problem of mergers of equals: Neither side was in charge. "The two camps would argue for months over whether retail or corporate should get the big resources, which people from which former bank should run the businesses, and everything else," says Dave Donovan, head of human resources at Bank One and a veteran of First Chicago.

Banc One and First Chicago were products of multiple mergers of their own, yet they had failed to impose strong central control on the banks they'd bought. Different regions set their own guidelines for making loans, sewing a crazy quilt of credit standards.

It seemed top management could agree on just one thing: Everyone wanted to grow revenues as rapidly as possible. The quickest route was piling on risky loans.

The pressure on lending was exacerbated by the need to make up for plunging profits at First USA, the credit card business that Bank One bought in 1997 for a lofty $8 billion. In the early days of the merger, First USA disastrously mistreated its cardholders, bumping rates from 4.5%, say, to 19.9% if they paid even one day late on just two occasions. Customers departed in droves.

With the stock diving, Bank One's board looked for a savior. They seemed to find it in Dimon, a former Wall Street wunderkind who had been president of Citigroup. For the previous 16 months, though, he'd been on the sidelines, ever since being ousted by his former mentor Sandy Weill. Right away Dimon recognized the opportunity. "This was my one big shot," he says. "How many times will big banks change their CEOs in the next three or four years, and of those, how many will hire an outsider?"

He knew surprisingly little about Bank One when he arrived. Still, he made an amazing gesture, buying $58 million in his new employer's stock with his own money, at $28 per share. "I didn't know if the stock was worth $35 or $20--$20 is more likely," he says. "I just thought I should eat my own home cooking."

Right from the start, Dimon terrified everybody. No one at the Midwestern bank had ever seen anything like his management style. He was snappy, rude, and intrusive--a manic, whirling dervish--in the midst of this courtly Middle American realm. "He's got his hand in absolutely everything," marvels Jim Boshart, a former Citigroup executive who heads commercial banking at Bank One. "He can't help himself."

The Dimon style is an outgrowth of a passionate, obsessive personality. He talks in a cascade of broken sentences. "Talking to Jamie is like drinking from a fire hose," says Linda Bammann, head of risk management for the bank.

Nor does his obsessiveness fade in different time zones. When Dimon was traveling in South Korea last year, he placed calls to each of his top lieutenants on Bank One's ninth floor around 4:00 P.M. on a Friday--a sort of executive bed check. "One after another, people walked out of their offices and proudly announced that Jamie had called them--at 6:00 A.M. Korean time, no less," recalls Dick Wade, head of Bank One's middle-market business in Michigan and Ohio. "Then it dawned on all of us. He wanted to make sure we weren't off playing golf!"

In Jamie's world, time--even Friday afternoons in summer--is too precious to waste. He's famous for his one-minute meetings. "Once he strips all the information he wants, you're no longer sitting there in his eyes," says Wade. "If you're still there physically, that's your problem."

It was with that kind of speed that Dimon dissected Bank One's fundamental weakness: The company was ramping up its financial offerings--car loans, brokered home-equity loans, even huge corporate credits--without really bothering to check if they were making money. Yes, such loans looked profitable, but that was only because the economy was so balmy. No one, it seemed, had bothered to analyze what would happen when a recession inevitably rolled in. At first Dimon was incredulous. "You don't run a business hoping you don't have a recession," he shouts.

Drawing on his years with Weill, Dimon started demanding defensive, plan-for-the-worst management. But Bank One's executives were mostly the wrong crew to lead the revolution. "The worst ones showed up at my door the first day to bullshit me," he recalls. "They were pretty good at it, by the way. They had 30 years' experience."

"People thought he was nuts," says Donovan, the human resources boss. "He'd yell, 'How can you run your business without knowing that!' or 'Your own people think you're weak, not me!' " On trips to Columbus or Wilmington, his first question to sales reps or branch managers was always, "What do you think of your boss?"

In the past two years Dimon has replaced 12 of his top 13 managers, hiring seven outsiders and plucking five quiet but competent Bank One veterans from the ranks. Loyalists from his past life flocked to the Chicago bank, with star managers choosing Dimon-hard adventure over comfort. Charlie Scharf, who now runs the bank's retail business, joined in 2000 from his post as CFO of Citigroup's corporate and investment bank. "It wasn't really a choice," says Scharf, whom Dimon had mentored in an earlier job. "I'm just following the best leader I've ever seen." Three months later Boshart arrived, shortly after retiring from his job as co-CEO of Citigroup's European investment bank, followed by CFO Heidi Miller, whom Dimon had first hired back at Primerica in 1992. "This is a topnotch team that could run a far bigger company than Bank One," says Prudential's star banking analyst Mike Mayo. "Bank One's got plenty of problems, but Dimon has built the team to make it a success."

The team was everything to Dimon. In his own words, he was back where he belonged, "back in the huddle." But for the first time it was Dimon calling the plays.

He'd waited a long time. In 1982, at the age of 26, Dimon found the mentor who would guide him for nearly all his business life. Straight out of Harvard Business School, he took an assistant job for a restless, supremely self-confident dealmaker named Sanford Weill, who had sold his own brokerage firm to American Express and later became company president. After a clash with Amex CEO James Robinson, however, Weill got pushed out. Dimon followed his boss into the wilderness.

Weill and his protege set up shop in a modest office in the Seagram Building. In 1986 Weill took the reins at Commercial Credit, an ailing outfit in Baltimore that made high-interest loans to miners, nurses, and factory workers. It would be hard to invent a less glamorous comeback vehicle. "The Commercial Credit crew were rebels, refugees from big corporate jobs who hated bureaucracy and wanted to do it their own way," recalls Bob Lipp, now CEO of Travelers Corp. It was no-frills all the way. At the board meetings lunch was burgers and fries.

A raucous family atmosphere prevailed, complete with the screaming. "Jamie and Sandy were loud; they were always yelling at one another," says Scharf. "Then Jamie would bellow out a point, and Sandy would grin and say, 'I got it!'"

In some ways Weill and Dimon were an unlikely twosome. Weill loves the New York social whirl and plush European vacations; Dimon is an outdoorsman. His entire life, friends say, is work and family--the ultimate vacation is camping out in the Alaskan wilds with his wife, Judy, and their three daughters.

But in business, Dimon and Weill clicked beautifully, forging a partnership that would sustain 16 years of spectacular dealmaking. From the tiny base of Commercial Credit they built an insurance, brokerage, and investment-banking empire, buying Primerica (owner of Smith Barney), Shearson, and Travelers in 1993. Then, after taking the Travelers name, they added Aetna's property and casualty business in 1996 and Salomon Brothers in 1997.

Weill and Dimon used a strategy that would foreshadow the latter's approach at Bank One: a sound, conservative management that let them become "predator, not prey," to use Dimon's words. The opportunity to do the best deals would come during economic downturns--not booms, when prices were too high.

So the duo kept a close eye on the balance sheet and relentlessly pared costs. As a result their stock price, even in bad times, performed far better than their rivals'. That gave them a strong currency with which to acquire targets, typically at the bottom of the market. They loved buying companies in distress. "Jamie never believed in paying big premiums in a hot market," says Steve Black, a Travelers veteran who is now chief of equities at J.P. Morgan Chase. "For Jamie, that meant you weren't in control, that you had to do a deal."

Weill was the brilliant strategist with a golden gut for bargains. Details weren't his strength. "In the beginning, no one had titles at Commercial Credit," recalls Dimon. "We're sitting around those ratty offices, and Sandy tells the crew, 'You guys figure out how to organize the management. I'm going to lunch.' "

But Weill couldn't have built his empire without Dimon's hands on every button and lever. "Jamie ran tough, realistic numbers on every deal," recalls the commercial-banking unit's Boshart. Adds Black: "Jamie was incredible at execution. He did a large part of the nuts-and-bolts integration that made those deals such big successes."

Eventually the difference in styles created its own stress. By the time Travelers bought Citicorp in 1998 to create Citigroup, the world's biggest player in financial services, the relationship between Dimon and Weill stood near the breaking point. According to Travelers insiders, Weill began to resent Dimon as early as 1995, when newspaper stories reported that many of the top brass regarded Dimon, not Weill, as their real boss. A year later Weill's daughter, mutual fund executive Jessica Bibliowicz, asked Dimon to make her head of asset management at Smith Barney. Dimon refused, raising his mentor's ire.

The tension boiled at Citigroup. Weill appointed Dimon to head of corporate and investment banking--not on his own, but in a power-sharing arrangement with no fewer than two other co-heads. Dimon and his co-heads hated the unwieldy troika. But he was especially angered when Weill didn't name him to Citigroup's board. Dimon unleashed his arrogant streak, grousing often and loudly. On Nov. 1, 1998, Weill fired Dimon. "I was part of the reason the relationship deteriorated," admits Dimon. "I was pretty nasty to Sandy, very tough on him. We argued so much he probably got tired of listening to me." Dimon broke the freeze by inviting Weill to lunch at the Four Seasons in New York a year after their rift. "We had laughs about the old days," says Dimon.

With Bank One, everything Dimon had learned from his mentor Weill, all the skills he'd honed salvaging troubled companies, was put to use--and then some. The scope of the bank's credit problems--the problems he had just inherited--was overwhelming. In the rush to swell its loans to big corporations, Bank One was charging interest rates that were far too low.

Dimon boosted Bank One's loan loss reserves, in several steps, by $2.2 billion. He systematically examined the profitability of each relationship, company by company. If customers were merely borrowing money and had no other business with the bank, then Bank One was losing money on the relationship. Dimon knew that customers would have to purchase other Bank One products in addition to cheap loans--derivatives, bond underwriting, asset management, or treasury services--in order for the relationships to become profitable for Bank One. If they just wanted to borrow money, Dimon declined to renew the loans. By paring unprofitable, mainly high-risk credit, he shrank Bank One's portfolio by 33%, or $50 billion. The move proved prescient: Bank One avoided about $1 billion in losses by reducing loans and limiting new credit to dicey, now-stricken telecom players when they still looked healthy.

Auto leases presented another disaster. The old Bank One cherished the product for its rapid growth and amassed an $11 billion loan portfolio. But the fun house contained a skeleton. The bank's former managers had predicted that it would resell the cars, once the leases expired, for $6 billion, or an average of $25,000 per vehicle. Dimon was suspicious. He spent days combing over industry stats, quizzing friends at other banks, even grilling leasing executives at car companies that borrowed from Bank One. "These were smelly, stinky old used cars!" he fumes. "I found out used-car prices had dropped 10%, and that we'd overestimated their value in the first place!" Their real resale value, he reckoned, was less than $22,000. Dimon booked $757 million in losses and write-downs. Bank One has since cut auto leases by 90%.

Nowhere was the lack of uniform lending standards more damaging than in the middle market. Bank One is one of America's three biggest lenders (behind Bank of America and alongside Wells Fargo) to companies with sales between $10 million and $250 million. It's especially strong in Midwestern manufacturers as varied as parts makers for Caterpillar and meat suppliers to McDonald's. Even as the economy started weakening in mid-2000, Bank One was ladling easy credit to flimsy customers. In part Dimon blames himself. "We were supposed to be so good at middle-market lending that I was slow waking up to the problems," he confesses. Then the recession hit the Rustbelt full-bore. Dimon saw far bigger losses coming than the middle-market veterans had predicted. "They said we'd peak losing 70 basis points. History told me it would be around 100," says Dimon. "The losses hit 180!"

Dimon unleashed his rage in a showdown with his middle-market managers. A Bank One veteran, since departed, dared posit that the situation wasn't dangerous. Dimon exploded. "If you were running a stand-alone company, the FDIC would close you down! Your name would be mud!" Undaunted, the manager blamed the losses on problems in the Rustbelt. "The Rustbelt?!" yelled Dimon. "Comerica and Fifth Third are in the Rustbelt! Their losses are half our losses!" Middle-market executive Wade was on the phone from his fifth-floor office in Detroit. "If I'd held out the phone, you could have heard him on the ninth floor," says Wade. The message registered. Bank One has established rigorous nationwide credit guidelines for middle-market loans. The big ones--$30 million and up--need approval from a credit committee of top officers.

The credit card business is also rebounding. Dimon is winning back First USA customers by investing heavily in marketing and customer service. The attrition rate has fallen from an appalling 20% to around 10%, the industry average. Last year earnings jumped from practically zero in 2000 to $946 million, still shy of the $1.1 billion peak in 1999 but a substantial improvement.

Strangely, for a down-and-dirty dealmaker, what excites Dimon most is slaying what Prudential's Mayo calls part of Bank One's "Cerberus": a hodgepodge of computer systems. As a vestige of poorly integrated mergers, Bank One now runs seven deposit systems, three clearing networks, and five wire transfer platforms. Plus it needs separate maintenance contracts for each system, which are far more expensive than a single contract, and pays a king's ransom in software programming. Today the company spends 16% of noninterest expenses on computer systems. Wachovia and Wells Fargo, by contrast, spend around 10%.

From the start, Dimon demanded that Bank One accomplish what his troops regarded as impossible: knitting together the computer systems. For Dimon, the main reason wasn't even cost. "Unless the computers talk to each other, you can't do acquisitions," he says. "You can't build a great bank."And building is what Dimon learned to do so well under Weill.

The question on many a mind these days is, Now that Bank One is back on its feet, will Dimon start buying? A few months ago rumors were flying that he was talking to Bear Stearns. But Dimon candidly says the best strategic match is a regional bank, probably one smaller than Bank One.

The problem is that most of them, like Comerica, Fifth Third, and National City, are pricey right now. And Dimon doesn't like high prices. What about a merger of equals? Dimon considers the question on his Falcon 900 corporate jet flying back from Columbus, between popping open bottles of chardonnay for his lieutenants, denouncing golf, and trashing exclusive country clubs. "A merger of equals can work," he says. "It didn't work for Bank One, but it did work for Citigroup." He takes a sip of wine. "But you've got to decide in advance who's gonna run things."

If Jamie Dimon wants to be your partner, guess who that's gonna be.

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