View From The Top: Ken Chenault, CEO of American Express

[Music] it's my pleasure to introduce uh today's speaker but before I do that I want to acknowledge that this is our final uh vft for the year and it's the ronac Desai Memorial talk uh ronak 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 um R 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 uh to to reflecting on his own personal leadership story he aimed to leave a positive and significant mark on the world but he wanted wanted to do so in a way that was consistent with his values to this end his talent and ambition was always complimented by his extraordinary warm spirit and his uh gracious Good Humor after Ron'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 uh to invite Ken Chanel to give this special talk as ronak interviewed Ken when he was last here in 2010 in the spirit of 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 uh in our series can teach you about your own role and potential as a leader I hope and I think ronak would also hope that this reflection helps you set your sights a little farther challenge yourself a little bit harder and to challeng and to think more a bit more deeply about what it means to pursue a life of meaning and impact while staying true to yourself and the things things that you value as a tribute to ronac before we begin please join me in a moment of silence thank you so now I'd like to welcome and introduce Ken Chanel the chairman and CEO of American Express Ken has been in amer American Express for more than 30 years having joined the company in its strategic planning group in 1981 before this he worked as an associate at Roger and Wells after graduating from Harvard Law School and worked as a consultant at baning company he was promoted to president and coo at American Express in 1997 and was named CEO in 2001 American Express or AMX 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 is best known for its credit card charge card and travelers check business in indeed AMX 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 long-standing prowess in consumer marketing that I'm sure you're well aware of membership has its privileges don't leave home without it these are just a couple of taglines that have really entered 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 amx's commitment uh and reputation for customer service in 2012 JD Power ranked amx's highest for customer satisfaction among card issuers for the sixth straight year Fortune recently listened as one of the 15 most admired companies in the world Ken chal and his team have certainly uh played a critical role in building and maintaining this strong brand when Ken was here in 2010 he talked about leading his 65,000 employees through the many challenges the company's 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 model from Napoleon make sure people are grounded in reality and give them strategies to be hopeful Ken's made an impact well beyond is currently co-chair of the Business Roundtable he serves on the board of IBM is a member of the Council of foreign relations and has received many business and Civic Awards Ebony magazine named him one of 50 living Pioneers in the African 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 wel in welcoming Ken Chanel to Stanford GSB [Applause] so what seat do you want me in I'll take okay all right so thank you very much for coming today um 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 graduated from college and 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 it was a Visa and they gave me that was the first mistake that was the first mistake the only mistake I've made since um and they gave me a credit limit of $1,500 and I told a friend this story he said you're an idiot for not getting an American Express so the next day I applied for American Express and American Express gave me a credit limit of $25,000 when I look back I can only think that you personally thought that I was 16 times more valuable than Visa day so hopefully I can repay some of that appreciation through this talk thank you I want to start out the interview with a very similar question to what ronic asked during his 2010 interview you've LED AMX through a pretty incredible time right after you joined a c or right after you became C o 911 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 or the largest challenges certainly first uh just let me say it's it's a real honor to uh be here and obviously uh I remember ronac very vividly and was just impressed with both his his authenticity and his humility uh so it means a lot for me to be here we really appreciate it so let me just say that um obviously 9911 uh and the financial crisis were absolutely incredible I would say the most horrible obviously was 911 from a from a emotional standpoint because we lost uh 11 employees and uh the loss of human life uh is is always a tragedy what was most important there was to Rally the organization to understand both the reasons uh why they should be helpful uh but also dealing with the reality that the travel industry uh was in total disarray uh spending on our credit cards had dropped dramatically and and what I recognized was that we had to transform the company uh in a relatively short period of time and uh 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 911 I decided that we had to substantially change our cost structure which meant that we were going to have to lay off employees and uh many uh people in my top executive team uh 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 and what I believe very strongly that one of the things you got to do in leadership is you need to tell people both the truth and you don't talk down to people and you explain to people the reasons why and I'll cut to the chase just to simplify so we can also talk about the financial crisis is what I explained to people were the reasons why what was happening to the company and at that time uh we always do a employee survey and a third of our incentive compensation is really based on the satisfaction and engagement of our employees because we really do believe in the surface surface profit chain and people said Ken if you're going to lay off uh basically 12% of the workforce the last thing you want to do is to do a survey on it and I said not only are we going to survey the employees but we're going to survey the people that we laid off um because from a leadership standpoint everyone has to be held accountable and I think partially because of the times that we were in with 911 but also the leadership and the way that was done weed the highest employee survey scores that we had in years so that was very much a turning point for the company and then frankly one of the most exciting things for me was over the last 5 to 10 years is in fact to see some of those employees come back to the company because of the growth to the company and what was happening the financial crisis was very different on one level uh it didn't have the the emotion of the loss of human life but you really felt that you were falling off the cliff and in a crisis what I think is very very important and where it really hit me uh was when Congress uh voted against tarp uh and uh I vividly remember my son is now a junior in college calling me and saying dad everyone says that the company's going down and you're going to be fired and I said Kevin it's not going to be that bad um uh don't worry about it uh but the reality is uh that represented the fear because to me when messages permeate the playground you know this is really serious ious uh that there are real problems and for us where we were impacted is we were very reliant on the wholesale funding model so we did not take deposits and so literally over a weekend and this goes to the power of a brand I said we've got to get into the deposit business and both inside and outside the company people said you know given what's going on with financial services companies and the environment there is no way you're going to get this up and running the only way we could do it was in fact to work with third parties so we in fact work with other financial services companies to to basically sell our deposit products and um I then put together a mantra for the company uh because I wanted to have all 60,000 plus employees focused on what we needed to do and it was really simple stay liquid stay profitable and then the Hope Port was selectively invest in growth so even in the most challenging times I wanted to reinforce that we were not going to take our eye off the ball of really being focused on growth but staying liquid was critical and fortunately within around 30 days we' raised around 8 billion in deposits we now have over 40 billion in deposits that gave me me a lot of Hope and gave the organization and the company a lot of Hope because I said why would people be putting money in with us if they thought we were going out of business number one number two we were able to stay profitable that was critical third was what I also looked at as far as cons customer Health was how many customers traded down from our more expensive products to less uh priced products and the reality is almost zero and we had hardly anyone who left the franchise that gave me a lot of confidence then the third thing that we were able to do back to the Mantra is we were very clear to people in the company where we were investing and that allowed us uh to come out of the crisis frankly really roaring so the momentum of the company was very very strong and my experience frankly over 30 years is what what you see with companies is it really is what happens uh during a crisis is how do companies act how balanced they are the majority of companies in fact Hunker in the bunker uh don't really have a broader perspective don't focus on growth and then generally two to three years after a crisis you start to see this demarcation uh that's caused and that's exactly what happened for us fortunately we were on the positive side of that and speaking of a lighter note o over those 30 years and even maybe more specifically over the last 12 as CEO is there one day that you look to and you're like man that is the day why I that's the reason why I do this this is a great day this is kind of what gets me excited and and and just um passionate about the business is there one day you'll look back to I I would say literally there uh fortunately are hundreds of days because my view in business is if if you're not having fun it's not worth it but I'll give you one example that again uh was a tragedy but uh gave me a lot of pride is um I think everyone certainly remembers the tsunami and you've got the problem and me um my second mistake that's right and and and and the reality was that uh our employees around the world with literally no instructions from Top management did incredible things to serve people uh and that just gave me incredible Pride because when people feel empowered to make a difference and literally um make up policies on their own but it was because they really believed in the service Mission and the service ethic of the company uh that's where I felt great but fortunately I have literally hundreds of examples like that uh that make me feel great about being at the company you're making my transitions really easy to the next question so the next question is actually about customer service when I think about American Express I think it's the gold standard of service and in fact you've taken a really boring piece of plastic and turned it into a club that has a cult following this room is full of aspiring entrepreneurs or managers who want to build equally great Brands equally great service cultures how did American Express do it and what would you what knowledge or advice would you provide to them yeah here's what I think is very very important in building a brand is uh if you think about what are the attributes of the most powerful Brands brands are really about bringing a rational and emotional connection because the best brands have a personal engagement and the best brand and the brands that are really long-term are those brands that in fact have what I call a higher purpose that it's more than just selling a product uh that you're changing people's lives you're impacting people's lives uh you're allowing people to have fun and when you have a brand that combines that rational value proposition with a emotional connection it's really powerful what people forget because the card has been so successful is the company started off as a freight forwarding company and what's critical is the reinvention of the company over 163 years one was that commitment to service was really critical the point I make about our Travelers check business uh is that it had no income requirement uh anyone could get it it was used all over the world that helped build the brand allowing us to offer a card right now part of what I do particularly with the Partnerships that we have with a number of digital companies I say the form factor is irrelevant the reality is think about the card as a platform to deliver service uh so what's important is that you've got to understand to create a brand you need a core Mission and for us uh we want to be the most respected service brand uh Trust of the brand is very critical service is very critical security is very critical um and then what you've got to do is constantly innovate uh because if you want to be a leading brand you've got to innovate in the market place all the time uh and what I would also emphasize with respect to service is what I found is and I say this publicly and um certainly I'm very competitive I want to win uh so I don't foolishly give out Secrets but the reality is that most companies don't want to make a commitment to service one is because it's a long-term investment two is they don't have the right metrics in place to know they're getting the returns we in fact know what service interactions will generate levels of spending uh we know what will drive retention and loyalty of our customers and one of the things that we did in our service despite the fact that uh for years we had great service around 10 years ago we said we're going to revamp it we're going to reinvent the way we do service we think people are too robotic we think we're too rule focused and we want to empower the people who are serving our customers whether that's online or offline uh and we literally changed fundamental aspects uh of our service and that leads to a very important point which I believe in strongly is you always want to create the company that will put yourself out of business uh that's the way you constantly need to think and if you believe that you're successful and you get arrogant about that success that success becomes a rut specifically on one service point I love your custom customer service Representatives so much so that I probably confide in them more than my own parents sometimes and they are consistently and always friendly what what's the secret training or recruitment process that you use to always have that consistency because I actually view that as a pretty big competitive Advantage it's a big Advantage you know here's here's here's the simple answer to that and um it took us a while to get there his attitude makes a difference is actually hire people who like to serve people that is a stunning Insight uh I mean give me a break uh um and so you in fact can interview people you can test people you can assess people who really do have the attributes and have the desire uh to serve and really enjoy it there are some people in fact uh when I talk to even senior people and I interview them and I talk about Service as a higher purpose I get some people say hey that's not a purpose for me it's not a higher purpose for me that's fine then I don't want to hire you uh because at the end of the day You've Really Got to Believe In what the core mission is but but attitude really does make a difference and you can interview you can assess for it uh you can Empower people uh but uh sometimes companies get so bogged down in policies and rules that for us uh as terrific as we were historically as a service company we did not explicitly enough focus on the attitude of people that we were hiring and now over the last 20 years our retention rates our customer SAT scores are off the graph and our service levels are really strong because we have people who really enjoy serving people and not everyone does a couple weeks ago Jack dorsy was on the stage here and he was talking about kind of the shift in almost Commerce and payments and absolutely that everything from how we buy where we buy what we use to buy is going to change and he talked about squares ewallet how does a company that's been around for 163 years kind of fit in with this model and are we are we going to stop carrying credit cards uh we could and frankly I don't care uh because it's really what's behind the card so Jack uh actually talked to before he started Square uh we work with square uh they acquire a lot of merchants for us what I think is absolutely terrific is that Jack is empowering uh small Merchants uh and really helping small business we are the largest provider to small business uh so the Synergy is really strong what I think is important and the way you change is I believe Commerce is changing dramatically and uh the way I talk about our company now is that part of our objective is bringing buyers and sellers together and uh the advantage that we have and this is an advantage that Jack recognizes and I give him a lot of credit for is square is built off an existing payments infrastructure that's a real Advantage so he has been Innovative what he hasn't done is to say I got to change everything that's one of the reasons why I like the mobile app Uber because they're building off off an existing platform and they're innovating and changing the payments experience so for us what we've said is we have a major major advantage in that we are the most integrated payments platform of anyone so we acquire Merchants we process Merchant transactions we are an issuer and we authorize transactions all over the world there is no other card company no one in payments who has a fully integrated payments model we're the only one now what that does is we talk about a closed loop and that means we have information on the enduser customer and the merchant and the ability to do modeling and algorithms with that data is going to give us frankly an even bigger Advantage going forward than in the past because the convergence of online offline unleashes the assets and capabilities that we have in the platform so part of what we started to do almost a decade ago was to say we really are going to embrace the digital transformation and what we've done is with existing people in the company uh people have really been able to change those who weren't uh are no longer with the the company uh because the reality is that they had to keep up with the change what I've also done is bring in people from outside the company and have a mix and match so we promote probably 60 to 65% of our people from within but we also bring in people from the outside and I'll give you one way that I dramatized this to our board is I had a voice over uh of someone talking about what the brand meant to them and they talked about MX and Trust security service reinvention and then as you pan down you saw the nose earring and the earrings and the tattoos and I said welcome to the new American Express because the point is this reinvention is critical uh so I think that uh the assets are there the Partnerships um I'll just mention one that I'm excited about uh with Twitter where we're using our uh closed loop platform uh where you can do tweet to buy we're the only ones that can do that with Twitter so when it was announced all these folks were calling up Twitter and saying we we'd like to do the same thing and Twitter responded the problem is AMX is the only one who has the platform uh so clearly there'll be people and there's a lot going on there's more innovation going on right now in Commerce and payments than almost any place else but we're not standing still staying with the theme of innovation I want to Pivot to policy right you're on the president's Council for jobs and um in competitiveness I was it's no longer in existence but I was and if we were to treat the president or the United States as one of your customers who's over levered um hypothetically what advice advice would you give on kind of current deficit levels how to manage um you know increasing debt levels over time so obviously with the proper service training I do it in a very uh polite but forceful way um but in all seriousness I think what is uh most important and and from my experience on the jobs Council I went in uh questioning how much of a difference could be made in creating jobs I actually um believe that the jobs issue is a solvable issue uh we did a lot of work identifying different industry areas where we can drive growth putting together both short and long-term strategies obviously you get down to politics and getting that through on both sides of the house uh but but the reality is that uh I think there's several things that need to be done uh one is uh we do have to promulgate some progrowth policies uh when I look at the infrastructure in the US uh there are major improvements that have to be made that can help stimulate job growth but also can make us a more productive and competitive economy secondly we have to deal with entitlements uh that's just the reality and so back to your analogy of someone who is having credit problems you got to sit down and you got to say here's the spending that has to stop uh but thirdly I think what's very important is that tax reform in a comprehensive way both personal and corporate uh we've got to really bring about a set of fundamental changes and I think that what is required is not just an issue of being focused on what the president the Senate and the house does I think we need to put more public pressure on and I look at this frankly as almost like a social movement that that um your generation the Next Generation your lives are in Jeopardy if you really felt that on a social issue I think you would have a much different attitude and approach and I think we need a far more engaged electorate uh that is going to put real pressure uh because the existing approach is not driving change fast enough that's great feedback and from what I understand about American expresses culture you have a culture of constructive confrontation and transparency and here at the GSB we have a euphemism that feedbacks a gift um could you share with us a story when you had to give or receive one of these gifts that's not so pleasant sure sure um I I would say probably halfway 34 uh through my career uh things were going really well um I thought I was uh uh getting terrific feedback which in general I was um and we had this process where uh you got feedback and there were always 10 things that you did really well and then 10 things that you needed to improve and it didn't matter who you were you always had 10 things that you needed to improve um because if you was no matter what your station you should always focus on being a good leader so it was always depressing particularly if you're really focused on saying I want to be the best to confront that there are things you got to focus on then we started to say well what are one or two things that you need to focus on and in our feedback process you had to talk to your team about here are the things here are the things that are positive here are the things that are negative and um so one thing that came out with me is uh that I didn't listen well and um I actually thought gez I I am respectful for people I sit in meetings I listen to people and the feedback I got was Ken you know your mind's always racing and if you don't think someone is saying something that's really smart you literally will just turn off uh you won't frown but we know that you are not there that's not what's going on here right between us not at all not at all um and uh that really that really hit me I mean I didn't fully realize I was doing it and didn't really realize not just the impact that was having on the person that I was talking to but obviously the impact that had in the entire room uh because at that time I wasn't president but I was a pretty senior person and uh you know almost the phrase was you know this is one of Ken Zone outs uh and he's thinking about something else and one of the things that I clearly learned from that feedback was that I was missing out it doesn't mean that every time someone was talking to me I thought they were saying something that was really terrific uh I would certainly let them know I don't think that's a great idea here are the reasons why but I was actively engaged and um you've got to have that two-way street and if you listen some more uh those ideas can come out so the the ability to be what I call an active listener can actually Empower that person who you're talking to that was a real learning for me it was incredibly helpful and it took several years before I got the recognition that I was an active listener now people say boy Ken is a really good listener um someone who's been in the company a long time I say well let me tell you about Ken 10 or 15 years ago he wasn't such a great listener so that's but I think for anyone one of the things that I try to do really every year is think about two or three areas that I want to improve going forward in my own leadership uh um so I'm going to lean in for this next question right um I know that you are very close friends with Cheryl Samberg and a big fan of her philosophy lean in but the facts are and kind of unfortunately so that inequality is still exists you're one of six African-American CEOs there're only 20 female Fortune 500 CEOs um why is the past so difficult for African-Americans females and other minorities at very senior levels within Corporate America yeah I I think there's several reasons I mean I think um clearly uh what you can't deny is that bias and Prejudice still exists and the legacy of bias and Prejudice has a Major Impact uh that just doesn't go away uh and uh you know I always go back if I could rewrite history uh and say in just pick a an era in the 1920s there was full equal opportunity despite all that happened historically I think we would be so far ahead but that didn't happen uh and um so I think you've got to deal with that issue I think second is and this is part of what Cheryl is talking about we can all analyze um the reasons why we can't get ahead and we should be very focused on that and we should all feel a collective responsibility to change that but one of the points when I was growing up uh that my father emphasized with me was focus on what you can what you can control and the only thing you can control is your performance there's several ways you can look at that he was not saying that to limit me what he was saying was that opens up a range of opportunities and from a accountability standpoint don't in fact um run away from that problem or challenge or barrier figure out a way to jump over it and so what uh Cheryl is certainly not saying is um that there are not a set of major issues and big issues and institutional issues that women have to deal with but that women clearly can take increasing ownership for what they need to do that a support structure is very helpful because we all need a support structure and that's important and uh that we got to take it very personally I think at the end of the day uh what's most important uh is there's a surprising phenomenon that happens and it's not really surprising when you get people in positions who look different and are different all of a sudden several years later you get more people who look like them and so the representation issue is a big issue is an important issue um and it is at some point uh this is where I go to just business metrics if someone is simply saying each year Ken I'm going to grow uh this business is really going to do well here are my strategies and each year nothing happens that's a problem so if there is a real commitment and a real Focus then there need to be measures and there needs to be accountability so that those things happen uh and uh I think that a business mentality around that can bring about some very important social change um I'd love to open it up to questions from the audience and right before I do I just want to say one quote that I found particularly inspiring from you in the 2008 um commencement address at Howard University you said it's your responsibility to the larger African-American community to face Prejudice and to make progress to face history and to make history and um that was something that I really enjoyed and reading and was inspired by so um I just want to share that feedback in a public setting but um thank you love to open up uh the audience to Q&A and uh let the tough questions roll good someone in the front here hi uh my name is Nikki Jordan and I'm a second year MBA student here really glad that you're able to join us today so I have a two-part question related to sort of those very tough decisions that you were talking about you know going into the deposits business Etc um one when you make those tough decisions would you say it's more of a intuition gut feeling that you have or more consensus driven uh from the people in your you're really senior advisers and the second part of that if it is more gut in what you think is the right decision then what is your process for bringing people on board and really rallying people behind really tough decisions yeah it's a good question I I think um one what I'm a firm believer in is that you have to apply what I call situational leadership that uh you can't just follow one style um uh sometimes you have to have a directive style sometimes you have to have a consensus building style uh there have to be some attributes from a leadership standpoint one of those that I talk a lot about is integrity because that's the only way you're going to build trust and that's for me the consistency of words and actions but um in some cases uh I have relied on my gut but backed up with some analysis uh I think it's very very rare sometimes uh on Creative issues uh I'll look at a piece of uh advertising and you sort of know this is it uh and you can't totally explain why but in a lot of situations I think you can analyze and you should uh but then judgment is really important but judgment should be based on what's the criteria that you're using to make that judgment what are the values that you're applying to make that judgment so what I don't believe in is making blind judgments I think you always need to have some criteria and you always need to have that balanced by what values uh are important from a consensus standpoint there are some issues that I know where I want to go uh but I know that I've got to get everyone involved and I'll give you one example when I took over as CEO I said I want to change actually some of the core attributes of our culture uh I didn't think we were focused explicitly enough on winning in the marketplace I didn't think we engaged enough in constructive confrontation so I literally put here are the values I'd like for the company on a piece of paper for myself and then I said in fact what we're going to do is we're going to do um sessions all around the world and I want teams sort to come up with the values and I'd say very honestly um I don't know what I would have done if the values hadn't pretty much matched what I had on the sheet of paper uh but fortunately they did the benefit of that was the buyin was almost instant because people knew it was a consensus driven process it wasn't me mandating that so I think there's certain issues where you mandate I'll give you an example where from a um uh the standpoint of having to decide was um and this goes back to 911 I decided that we were going to return to our headquarters uh the majority of the organization would have voted against it for very understandable reasons uh I thought it was important for us to go back um explain the reasons why and it was accepted um so there's some things that you can't do by consensus and that was more of a gut belief feeling but it was based on a set of values beliefs of why we should go back um so I think you want to make sure uh that you adapt your leadership style to the situation which means you've got to assess in the lingo that we use at our company you've got to assess the Readiness of your group to accept certain leadership so there's some situations where you know you've got to be very directive there are other situations where you're going to be more consensus driven hi my name is Chandra Chava and I'm a happy MX customer good thanks for sharing your thoughts my question is regarding the new markets that are coming up now or emerging so for example there are 2.5 billion people who don't have access to banking is MX planning to do something in that area and if you are what challenges do you see given the uh you know lack of brand in those countries and the US relations with those countries so here's here's what I think is interesting one is I think um a number of the emerging developing markets obviously represent tremendous growth opportunities what we've seen from a brand standpoint whether it's China India a range of markets that our brand doesn't limit us uh and people find that strange but I think one of the reasons why our brand is viewed as a more open brand is because of the heritage of the travel business that we really cut across borders and so people don't look at us as a uson company alone uh really has not hurt us so even in a place like Russia uh the brand uh is really powerful but I think the key part of your question is um how do we open the brand so back to the importance of this convergence of online offline the implication of that of what I've said to our people is scale has been redefined so it's not enough to say well we got 100 million cards when Facebook has a billion customers Google has 1.7 billion customers uh and the fact that to your point there are many people that don't have access to credit and debit products so we're very focused on it so I'll talk to you about two things we're doing one is we've come out with what's called a reloadable prepaid card which a reloadable prepaid card is you deposit money into the card the reality is that this was first launched in the us but we also are going to be launching in a number of markets around the world and in the us alone there are 304 billion households that are unbanked or underbanked so that means if you don't have a checking account you pay $800 to ,000 to in fact have access to your own money all right so if you want to cash your paycheck you pay to cash your paycheck you want to send money to someone someone in LA from here it could cost you 10 or1 to send 80 bucks so the reality is is that there is a tremendous need so we came out with a product that is in fact on a digital platform uh and it is uh you can operate it totally on mobile and as you know the penetration of smartphones is as high or higher in non-affluent sectors than it is affluent sectors because they can't afford a laptop they can't afford Broadband services so this is a product that people initially said to me well AMX you know you've got these high-end cards how can you offer this product and I said Back to the Future the reality is the travels check business Freight forwarding business was that a prestigious business that in fact enhanced the brand because we were focused on service the question is creating the right value proposition with the right economics to that segment we think this is going to be a very exciting product since we launched it in October 85% of the customers coming in are new to the franchise uh almost 50% are under 35 um so we have a lot of Hope there another thing we're doing in China is we have done a joint venture with a company called lean lean you've heard of mobile top up so you go and you want to top up your minutes on your phone in China you go to a kiosk what we're doing is off of of a mobile phone uh you'll have the access to do P2P we're in Three provinces now we're expanding this company has 300 million customers so I wouldn't mind getting a nice percentage and penetration of that customer base so what's important is that we have redefined the scale and then we've said there also opportunities to bring in to bring buyers and sellers together around the world why because we have a global authorization system where literally we can basically decide every single Transaction what that credit limit is going to be instantaneously well if you think about a global Marketplace in the ability cross border for goods and services that presents a tremendous opportunity so the traditional card business is changing dramatically we're not walking away from that business but we're expanding dramatically into other areas and if we don't dramatically grow in those markets we're not going to be a growth company so we have a strong Focus there I think we have time for one more question from the audience or was someone here right in front Andy is it on oh is it on okay um you can give her one more one of the benefits of defining yourself in terms of a higher purpose is that it doesn't confine you to a particular product or service or category um how far do you think you can and how far do you want to push the MX brand do you think there will come a time where our relationship with MX occurs in something that's completely removed from Financial transactions or financial services yeah you know already if you think about it um your relationship with us is um I think more than just a financial transaction um we are and always have been far more involved as a lifestyle product so when people ask me about competition I'm competing with almost every lifestyle provider in the traditional business because if I'm reduced to facilitating a payment that doesn't make me special at all so I think that where you're going to see us uh spread out more is in Commerce uh so the things we've done with Twitter and Facebook where you can take what we call our spin graph and connect it to the interests and preferences of uh Facebook customer and connect them is pretty powerful and we can do that with a closed loop so uh I think that certainly we're going to spread out more in Commerce travel gives us a tremendous opportunity of what we're doing from a lifestyle standpoint uh the last thing I want right where we will have a problem is if we're positioned more and more as just a financial services company what has helped us tremendously from a brand standpoint is the customer looks at us more as a service company than a financial services company I want to make sure I keep that demarcation so so we'll do one last question because we skipped you we'll repeat it if you just say yeah sure so first of all my name is I'm actually from GS 2010 uh R was one of my first uh the first classmates I got to know and was at the last session so I really appreciate I also want to say after graduating I learned a great deal by practicing so is particularly helpful even more than two years ago um but my question is now you the CEO and president how do you make sure you don't get flying spots people are not afraid to give your friend feedback to make sure you continually are at your best yeah I I think what's very very important is one uh which I feel strongly is um I think it's a mistake and a number of people do it is they get their person confused with the job they hold uh I don't get I try not to get that confused I like being CEO uh but that's not where I take myself worth from the fact that I'm CEO one of the things that I do in a very very aggressive way is I seek out feedback and input both inside and outside the company uh is really to talk to people who have have very different perspectives from mine to try to find out and to build a network uh both inside and outside the company that will talk to me because the reality is doesn't matter who you are people will be well-meaning and they'll say I don't really want to talk to Ken about this I just don't want to worry him well the reality is sometimes when that's done uh I'm missing a big issue that can impact the company and that's not helpful it's my job then to make sure that I'm very aggressive from an Outreach uh standpoint and so I really am throughout the company through hierarchy people who know know me know that if you report directly into me it's not that I'm going to be checking on you with other people but I'm going to call people five or 10 levels down in the company uh I'm going to have meetings with people uh it's not going to be based on title it's based on learning about what the issues are what the problems are and then outside what I want to ask people is what do you think we're doing wrong what do you think we need to do better what are the issues and that goes back to the constructive confrontation so you really want to create a climate where you're being pushed and in fact I don't think I'm really getting the true word unless I go through periods where I'm feeling uncomfortable uh and I think that's a good state for people to be in periodically not permanently but periodically uncomfortable uh because that is a leveler and that's important particularly when you're a CEO to be in those situations uh where you can be in a more level place in closing we always ask our view from the top speaker is the same question that we all have to answer on the GSP application what matters to you most and why well things change over time uh what I would say is what matters to me most uh is really my wife and my two sons uh from a public policy standpoint what matters to me most is income inequality uh and third for me personally what matters to me most is maintaining my integrity and authen authenticity thank you very much thank [Music] you

Channel: Stanford Graduate School of Business

Views: 328,887

Keywords: American Express (Organization), Brand Management (Literature Subject), Credit Card (Invention), Chief Executive Officer (Project Role), financial collapse, financial institution, global competition, stanford gra, strategic leadership

Id: -QhTBkkaTZo

Length: 57min 8sec (3428 seconds)

Published: Thu Jan 16 2014