Here is the full transcript of Ken Chenault, CEO of American Express at Stanford GSB View From The Top – Roanak Desai Memorial Talk.
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Introducing Speaker: And it’s my pleasure to introduce today’s speaker. Before I do that, I want to acknowledge this is our final VFTT for the year. And it’s the Roanak Desai Memorial talk. Roanak was a member of the MBA class of 2010. And we’re joined today by several of his classmates and friends as our special guests.
Roanak was a remarkable and accomplished individual. And as a student leader of the View From The Top series, he was passionate about exploring how prominent leaders who run some of the world’s most influential enterprises can truly impact the lives of millions. He recognized that each of these leaders have their own personal story, their own values and their own ideas about how to make change happen. His desire to learn from these individuals was motivated by a commitment to reflecting on his own personal leadership story. He aimed to leave a positive and significant mark on the world. But he wanted to do so in a way that was consistent with his values. To this end his talent and ambition was always complemented by his extraordinary warm spirit and his gracious good humor.
After Roanak’s untimely death, his classmates asked if we could dedicate one talk each year in his memory. This year we thought it was only appropriate to invite Ken Chenault to give this special talk, as Roanak interviewed Ken when he was last here in 2010. In the spirit of today’s talk, I encourage you to reflect not only on our speaker and the company that he runs but what his experience and the experience of all of the speakers in our series can teach you about your own role and potential as a leader. I hope and I think Roanak would also hope that this reflection helps you set your sights a little farther, challenge yourself a little bit harder and to challenge — and to think a bit more deeply about what it means to pursue a life of meaning and impact while staying true to yourself and the things that you value.
As a tribute to Roanak, before we begin, please join me in a moment of silence.
So now I’d like to welcome and introduce Ken Chenault, the chairman and CEO of American Express. He has been at American Express for more than 30 years, having joined the company in the strategic planning group in 1981. Before this, he worked as an associate at Roger & Wells after graduating from Harvard Law School and worked as a consultant at Bain & Company. He was promoted to President and COO at American Express in 1997 and was named CEO in 2001. American Express or Amex founded in 1850 as a Fortune 100 diversified financial services company with more than 30 billion in revenue. It’s one of the 30 companies that make up the Dow Jones Industrial Average and it’s best known for its credit card, charge card and traveler’s check business. Indeed Amex accounts for roughly 24% of the total dollar volume of credit card transactions in the United States. Much of their success stems not from an individual product, however, but for their longstanding prowess in consumer marketing and I’m sure you’re well aware of — membership has its privileges. Don’t leave home without it. These are just a couple of tag lines that really enter the American cultural lexicon. And as a result American Express is truly one of the best known brands in the world today and is consistently ranked among the world’s top 25 most valuable brands.
Another reason the brand is so valuable is Amex’s commitment and reputation for customer service. In 2012 JD Power ranked Amex highest for customer satisfaction among card issuers for the sixth straight year. Fortune recently listed as one of the 15 most admired companies in the world. Ken Chenault and his team have certainly played a critical role in building and maintaining a strong brand.
When Ken was here in 2010, he talked about leading his 65,000 employees through the many challenges the companies experienced during his time as CEO saying, “Clearly my tenure has been one of confronting some of the most challenging crises that we’ve seen in the last 10 years. I take my motto from Napoleon: Make sure people are grounded in reality and give them strategies to be hopeful”.
Ken’s made an impact well beyond Amex. He is currently co-chair of the Business Roundtable. He serves on the board of IBM as a member of the Council of Foreign Relations and has received many business and civic awards. Every magazine named him one of the 50 living pioneers in the African-American community having been only the third African-American to run a Fortune 500 company. Today Andrew Baldwin, one of our second year student leaders from the View From The Top team is going to interview Ken. And so please join me today in welcoming Ken Chenault to Stanford GSB.
Andrew Baldwin: So thank you very much for coming today. When I found out that I was going to get the chance to interview you, I was thrilled. And it took me back to the first time that I interacted with American Express, the brand. I would just graduate from college. I was moving from Indiana to New York. And when I got to New York I found out that New York’s a little more expensive than I thought. So as any responsible 22-year old, I applied for my first credit card who was a Visa.
Ken Chenault: That was the first mistake.
Andrew Baldwin: That was the first mistake — the only mistake that made sense. And they gave me a credit limit of $1500. And I told a friend the story. He said you’re an idiot for not being on American Express. So the next day I applied for American Express. The American Express gave me a credit limit of $25,000. And when I look back I can only think that you personally thought that I was 16 times more valuable than Visa did. So hopefully I can repay some of that appreciation through this time.
Ken Chenault: Thank you.
Andrew Baldwin: I want to start out the interview with a very similar question to what Roanak asked during his 2010 interview. You led Amex through a pretty incredible time right after you joined — right after you became CEO, 9/11 occurred. And then you also were the head of a financial services company during the worst financial downturn in 80 years and kept your job which is no small feat. Can you walk us through the one or two days that were the biggest tests for the largest challenges?
Ken Chenault: Certainly. First, just let me say it’s a real honor to be here. And obviously I remember Roanak very vividly and was just impressed with both his authenticity and his humility. So it means a lot for me to be here. Really appreciate it.
So let me just say that obviously 9/11 and the financial crisis were absolutely incredible. I would say the most horrible obviously was 9/11 from a emotional standpoint, because we lost 11 employees and the loss of human life is always a tragedy. What was most important there was to rally the organization, to understand both the reasons why they should be hopeful but also dealing with the reality that the travel industry was in total disarray. Spending on our credit cards had dropped dramatically. And what I recognized was that we had to transform the company in a relatively short period of time. And that leads me to one of, I think, the real challenges from a leadership standpoint, is how to be decisive and compassionate.
So within 60 days of 9/11 I decided that we had to substantially change our cost structure, which meant that we were going to have to lay off employees. And many people in my top executive team said this is not the time to do it. And from an emotional standpoint, they were absolutely right. The concern that I had was that the future of the company was at stake. And I said we have to do this in a compassionate way with our employees. But we have to do it.