Chenault talks to LBSR about American Express's service ethic and his leadership priorities.
Watch Chenault's interview here.
Cathy Collis: What were the key career experiences that really shaped the way you are now as a leader?
Kenneth Chenault: Early on in my business career I started off as a consultant for two-and-a-half years and what was valuable about that experience is that you worked in a range of industries and you had to very quickly assess what the situation was, what the key issues were and what the key levers were that you could pull that would change the performance of a particular business. That was very, very valuable. The second experience that was very helpful to me was that I had the opportunity to turn around a business. In the early 1980s, American Express had a business that sold merchandise through the mail. I had the chance to run all aspects of the business – systems, operations, marketing, customer service. And also we had to develop a strategy to sell a range of products to specific customer segments. I also had to learn how to motivate an organisation that had been low performing to become a high-performing team. The third experience was one of my most challenging experiences and that was managing the company in the aftermath of 9/11. Our headquarters building was right across the street from the World Trade Center. We lost 11 employees. So the emotional challenge, the psychological impact on the company plus the dramatic impact on our business were formative experiences for me. And then the last crisis was the financial crisis that we experienced in 2008 and 2009.
CC: So all those experiences shaped the kind of leader you are. What specifically did you take from those experiences that has made you into the leader you are today?
KC: I think what’s very important about all of those experiences and the lessons I learnt as a leader was, firstly, what is most important is to have integrity. That is the foundation of leadership. It is very hard to motivate people if they don’t trust you. And for me, integrity is the consistency of words and actions. The second lesson is to have a clarity of vision about where you want to take the business – where do you want to take the business from where it is today to where it needs to go? The third is that you need to develop a galvanising vision that will excite people and motivate them so that they can bring about change. And the fourth is that you need to focus very closely on the development of people and leaders, because leadership is critical to any sustained success of a business or company.
CC: Is there one piece of career advice that you find yourself returning to?
KC: I would say the best career advice I got was from my father who said, don’t get confused about who you are with the title or job that you hold. And the message there is very clear: that your career, your job, is very important, but who you are as a person, your values and beliefs, are most important. Some people allow their identity to be 100 per cent defined by the title and job that they hold. That is a mistake because what you want to be is a unique individual who has strong values and beliefs. And that’s something that I really take very seriously, because leadership is a privilege. It’s not entitlement.
CC: What would you say are the essential qualities for success in your industry today?
KC: Well, I think the essential qualities for success in the financial services industry are similar to the essential qualities for success in any industry. One is integrity, the foundation of trust. Second is the ability to create a galvanising vision. Third is the ability to develop and create followership. Fourth is to innovate, because if you want to be a market leader you want to innovate in the marketplace. And then what I think is very, very important is service. Whether your customer is an individual customer or a small company or a medium-sized company or a large company, service is very essential because that provides rational value but it also creates an emotional connection.
CC: What gets you up in the morning?
KC: I really love working with our people. They are very committed. They believe in serving the customer. I love the creativity and working with ideas and the opportunity to bring those ideas to fruition. That is incredibly motivating.
CC: While you’ve been CEO what has AmEx done differently to set itself apart from its competitors?
KC: I think what’s very important is American Express starts out with some very critical advantages. Number one is our commitment to service, that we want to be the world’s most respected service brand, and so we are a services driven company. Second is our brand, which stands for something – for service, security, trust and innovation. And what I believe we’ve been able to do under my tenure is, one, we recognised the convergence of the online and offline world. So the digital transformation plays off the integrated business model that we have, because American Express operates both in the digital world and the offline world. That has been a very important change. Second is that we have been a pioneer in loyalty. Membership Rewards is one of the largest loyalty programmes in the world. It has practically become a virtual currency. That has provided tremendous opportunity. But the third thing that I think is very important is focusing the company on what we do best. So we are not a wide, diversified financial services company. What we are is a services company that is involved in payments, that is involved in commerce. And so we have an expansive set of opportunities and what I’ve tried to do is to encourage the organisation and to drive the organisation to innovate against those priorities.
CC: And these set American Express apart from its competitors to give it a very different identity?
KC: Yes, because what’s very important – and I go back to the service identity and the service ethic that we have – is that none of our competitors has as their mission to be the world’s most respected service brand. That is a very expansive vision, but it also provides very clear focus and so that gives us an incredible advantage. But the second is to have the company very focused on innovation. And one of my sayings in the company is, we want to be the company that will put us out of business because that means that there’s a focus on constant reinvention and that is a very important attribute of our company; we are in constant reinvention.
CC: What do you see as the key challenges for your industry over the next five years?
KC: What’s very important, and one of the key challenges in the payments industry is, first of all, how do you define the industry, because there is now a convergence of payments and commerce. You have to be involved more broadly. If you’re just narrowly focused on payments, are you facilitating commerce, are you facilitating someone’s lifestyle, are you helping companies become more productive? And payments becomes a vehicle against the overall objective so what’s very important is to set the right strategic context.
Second is to make sure that the company doesn’t rest on its laurels because success can become a rut and you can say to yourself, well, we’re very successful, why do we need to change? In the world we live in today, if you stand still you fall back and so it’s very critical to constantly encourage the organisation to change. Third is we’re dealing in a very uncertain economic environment globally and American Express wants to continue to grow on a global basis. So operating as a growth company in a slow-growth environment – and I believe we are going to be globally in a slow-growth environment for the next several years – is going to be very, very important. Obviously all companies, but particularly companies in financial services, are dealing with increased regulation and it’s very important to understand how you operate in that environment. But what we are very clear about is we are a brand-driven services company so we want to do the right thing for our customers, for our shareholders and for our employees.
CC: How do you make sure that you’re attracting absolutely the best and the right talent to American Express?
KC: Talent is key to success for American Express and we spend a great deal of human resources and dollars against the objective of bringing in the best talent. First thing that we do is we try to make people aware of what the company stands for; what do we believe in, that are our key objectives as a company? And what’s critical is the types of people we are most interested in: people who like service, who believe in the service ethic, because I’m a firm believer that you need to make sure that the people you hire are aligned with the values, the beliefs and the strategies of the company. So that is the first requirement.
The second is that we are interested in getting a wide range of diverse people into our company, not just based on race or other groupings, but people who have different perspectives in the world, because we operate as a global company. We operate trying to meet the needs of a wide range of segments. And so what we want are people who think differently but also are aligned with our core values. Third, what’s very important is we want people who are committed to reinvention. And in the environment we’re in now that means people who understand the convergence of the online and the offline worlds, because this digital transformation is occurring across our entire company. We are developing, and if someone has been with the company for 30 years, we want them to play a leading role in the digital transformation. We also want to bring people in who have had experience in digital. So what’s critical in our strategy is, one, bring in the right types of people; two, giving them the tools to develop; third, teaching them how to become good leaders and great leaders. So we have a very comprehensive programme that helps our people become better leaders.
CC: What role do business schools play in this strategy? You’re obviously not just looking for people with MBAs.
KC: Business schools play a very critical role for us. We recruit globally very heavily for business school graduates and the types of skills and techniques that one learns in business school are incredibly valuable. But I would say what also has been very important for us is the fact that many business school graduates have experience prior to coming to business school coupled, with the technical skills that they’re learning in business school, and the subjects that they’re exposed to make for someone who can make an immediate contribution to the success of the company. So in business schools we are very much finding our pipeline of future leaders.