Transcript of 713: Ken Chenault - Leadership Lessons from 17 Years as American Express CEO: How to Earn the Top Job, Hire Great Leaders, Build Culture, Challenge the Status Quo, and Lead with Character

Welcome to the Learning Leaders Show presented by Insight Global. I am your host, Ryan Hawk. Thank you so much for being here. Go to learningleader.com for show notes of this and all podcast episodes. Go to learningleader.com. Now, onto tonight's featured leader. Ken Chenault was chairman and CEO of American Express for 17 years. Wow. Warren Buffett called him, quote, the gold standard for corporate leadership. Today, he's chairman of General Catalyst, and his new memoir is called Equal to the Task. During our conversation, we discuss the must-have attributes to get hired as a leader on Ken's team. Really good. Then the importance of documenting your operating principles. Ken shares a story about how this not only helped him, but all of American Express. And then he talks about the incredible risks He took in order to earn the CEO role at American Express. We talk about all of that and much, much more. Ladies and gentlemen, please enjoy my conversation with Ken Chenault. Your dad passed the New York State dental exam with the highest score ever recorded. Is that right?

Close to it. Yes.

Wow.

For at least for 50 years was the record.

50 years?

Yeah.

You talk about your dad in your new book. I'm curious, what's one of your favorite slash most useful stories or things that you learned from your dad?

There were a number of things that I learned from him, but one that has helped me tremendously in my life and career is often we confront difficult situations and we all have to deal with uncertainty. And we all have to deal with setbacks. And one of the things my father would say to me when I would complain about something or some barrier is he would say, the only thing that you can control is your performance. So focus on your performance. And there's something, Ryan, that's empowering about that. It speaks to me about accountability and responsibility, but also that's something you can control is your performance. It gave me a sense of empowerment.

He also said the words, Ken, never forget that you are equal to the task. And that phrase has served you well for a number of reasons. What was he referring to when he said, Ken, never forget That you are equal to the task.

Well, let me, Ryan, just give you the origin story of equal to the task. So I was 5 years old. I was a pretty outgoing kid, but my first day of kindergarten, I froze. I got really scared. I saw all these strange people. I started crying and I ran under a bench. And my father realized I was gone. Someone said, I think he went outside the classroom. My father saw this bench and I was literally hiding under this bench. And my father, who was someone who was very attentive and very caring, but also was a tough guy, he sort of reached down, pulled me out. Sat me on his lap and said, Ken, look, I know this is all new for you, but I can tell you, your mom and I, we really think this school is gonna be terrific. We think you are gonna enjoy the kids and the teachers. And then he sort of put his hands on my shoulder and looked me right in the eye and said, and Ken, I know you're equal to the task. Now, very frankly, Ryan, At that point, at 5 years old, I had no idea what he was talking about.

But there was something about that term that became a measuring stick. And for my father, what I came to realize as I grew older, that equal to the task was a challenge. And what it also said was, you've got to work for it. You're equal to it, But that's different from, well, you're gonna achieve it. And it says that you have to really work for it. And the other part, as I grew older, and I remember in my 20s talking to him about it, for him, he did not like people to think that they were above a task, that they were better. They really had to apply their full being. To getting it done.

I liked reading about, I'll probably pronounce this wrong, Mrs. Lacroix.

Yeah, Mrs. Lacroix.

Lacroix. Oh, okay. So your teacher from 1st through 8th grade, right?

Yes.

She said you had an inner fire, but that at one point you were gloating and she said, Ken, if you wish to be a king, you need to have followers. A king looks after his people. And you later called that your North Star. What was that all about?

So when I was, I think, 7 or 8 years old, there was a hill on the playground at my school. You may have played this also, Ryan, but we played king of the hill.

Yeah.

And the objective was to get to the top and to protect the top of the hill and not let anybody else get it. And I enjoyed doing that almost every day. And Mrs. Lacroix happened to be in the playground and she saw me. I had my hands up and I was saying, I'm the king, I'm the king. And she said, Ken, come down. I want to talk to you. And she said, look, that's not what kings do. The best kings, the good kings are the ones that take care of their followers. It is not enough that you just protected the hill. You gotta protect people. You gotta have followers that understand that the king cares for them. And again, whether I grasped all the subtleties of that at that age, but what I did grasp was that there was a different purpose for being a king. That over time became a north star for me. that in my business career, I would tell people that one of the ways I'm going to judge you is on the quality of your followership.

Yeah.

That to me is a very important lesson because we live in an outcome-driven world. And let me be very clear, Ryan, I'm all about outcomes. I want to drive results, but it's how you achieve those results and will they be enduring? And really understanding in a simple way, in evaluating leaders, what's the quality of their followership? I think for me is a North Star for leadership.

How do you measure the quality of someone's followership?

I think part of what you look at is who are some of the best performing people? Who are some of the most talented people? Who are other people that folks look up to? And then very importantly, who are the people who are able to achieve results on an ongoing basis? So I actually think that you can have very clear metrics, quantitative metrics, but also you can have qualitative signposts that will indicate to you The quality of the followership. And if a person in business, if you look at, you know, it's like, who, who are some of the great coaches? Who are the players? What was their coaching tree? For me, what was the followership tree that's being created by the leader? Do they train and develop and attract the best people to work for them? That's an example of quality of followership.

So in your role as CEO of American Express, a big part of your job is hiring leaders, promoting leaders, surrounding yourself with excellent people with high-quality followers. And you're still doing this, right? You're an active—

Absolutely.

Yeah, you're still doing this right now, General Catalyst. So I'm curious, when you're thinking about a leader either to invest in, and maybe it's different, but you let me know, or let's say hire slash promote when you're at American Express or at General Catalyst, what are some of the must-have attributes or the must-have qualities in a person to be hired and/or promoted as a leader?

Great, great question, Ryan. I think for me, there is a core requirement that that leader is someone who engenders trust, that people can trust the leader. Everything flows from that. So is this a trustworthy person? That's really important to me. Second, I look for people— obviously it's a given that I want people who are intelligent, who are driven. Those are core. But I think what's also important, and I've just it's been reinforced to me time and again in business and in my leadership journey, is I want people who are willing to go against the status quo.

Hmm.

So as I look for people's results, part of what I try to divine, I will always ask them directly, is take me through when you had to go against the existing product set, the existing strategy. How did you do it? How did you go about it? Why did you do it? Because part of what is necessary, and, and I look for this in leaders, is courage.

Mm-hmm.

People are frankly sometimes surprised when I say that, but I think to be an enduring effective leader, you need courage.

Yeah.

Then I also look for someone who is decisive but is also caring, because I think the best leaders connect with the hearts and minds of people. Boy, if you can be a decisive, caring, person, it doesn't mean again that you are afraid to make tough decisions. You have to. That goes back to the courage point. You have to have the willingness to do that. But I also think that if you are a caring person, that makes you an even more effective leader.

What was, uh, one of your favorite times, you personally, whether your career or just life in general, One of your favorite times of going against the status quo?

I would say there were a number of cases, you know, from a serendipity, luck. My career has been making a series of decisions that were not conventional, that went against the grain. I'll give one example. Membership Rewards was a loyalty program that we developed for the card business, and I led that effort. It was so much fun, you know, in a big company. And at that time in the culture of Amex, there was this view that if we offered card members incentives, to use our product, somehow we were discounting the product or damaging the prestige position of the product. And the way I looked at it is card members needed to be rewarded for their loyalty, and having a loyalty rewards program made a great deal of sense. But what was so much fun was I put together a team across the company and I said, we've gotta operate in stealth mode because I was afraid that the traditionalists in the company would kill the program. And it was frankly like a startup experience. I mean, we just went from the morning to the night for like 4 months putting this program together. And we got it through and it has become one of the most important foundations for the company.

You could not imagine Amex without Membership Rewards.

I can't even fathom that, that it existed. When did that become a thing?

It came into existence in the early '90s.

Okay. 'Cause I feel like I've had it my whole— I've had Amex for a long time. Yeah. Amex Delta holder. because of the spend, I get to be a Diamond, which is nice. Uh, even though I don't fly enough to earn that, which is great because now that just seems obvious, right? It's just like, of course you do that. Everybody does it. But at the time, right, it wasn't obvious.

It wasn't obvious. It was a big challenge. It was a big fight to get that. And it was incredibly satisfying not just to be successful in getting it through, But to see what it became.

Yeah. Are you still close with the Amex leaders?

So, you know, it's interesting, Ryan. Steve Squeri, who I recommended to the board, who's doing a great job as CEO. Steve and I are good friends. I give him his space because one of the things that I told him when he took over, I said, Steve, I don't want you to ever think about what Ken would do. Think about what's right for the company and what you should do. I'm not the type of former CEO that needs to be embedded in some way in the business. And when I decided to step down, I decided I have another chapter in me. And so I love being CEO for close to 18 years, but I love what I'm doing now.

Guys like you too, you're not able to just go chill at the beach house. You, maybe for a couple days. I met a lot, a lot of these guys who are just crushing it, helping so many people, putting a big, huge positive dent in the world. It doesn't seem like you're capable of just, you're just going to go relax forever.

No, you look, at the end of the day, here's what's important for me in this chapter of my life, which I really did reflect on, is what do I want to do? One, what was very important to me was I believe Technology is the great enabler. But what I also fundamentally believe, and it's a first principle for me, is that business exists because society allows it to exist. Therefore, we have a responsibility. And what I believe in, and I talked with my partners at General Catalyst and Hamant Dinesh, who over time became the CEO, and I was helpful in that succession, is what we say is there shouldn't be a conflict between profit and purpose. It makes it more difficult. Yeah. But if you really want to build an enduring company, you have a major advantage if you have a purpose, and you're not going to be around to make that purpose meaningful Unless you're profitable and you're growing. So I think what sounds like competing forces actually come together for me.

I read that you wrote letters to 4 consulting firms. Is this right? Yeah. And you were admitting to them, I, I, I'm kind of new to business. And 3 of 'em were like, all right, forget it, dude, you're out. But Bill Bain said intellectual horsepower. That's what he saw in you, is that right? Tell me that story.

So it's, you know, what's interesting is growing up, I I didn't know much about business at all. I had minimal exposure, if any, to people in business, and certainly big business I didn't have any exposure to. But a friend of mine from law school who had also gotten an MBA, I had dinner with him and he was just so excited about what he was doing. For whatever reason, that really made a big impression on me. And so I did some research on consulting firms and I literally, to your point, wrote them and said, look, I don't know much about business at all, but I'm a hard worker. I actually described, I met this person and the way he talked about consulting in this way. And every firm, not surprisingly, I think they probably crumpled the letter and threw it in the wastebasket. And Bill Bain, it was one of those lucky moments that here was a person who had not gone to business school, I think was head of alumni giving at Vanderbilt or had a position there. And the founder of the Boston Consulting Group, Bruce Henderson, was a Vanderbilt graduate and got exposure to Bill and said, boy, this person has intellectual horsepower and drive.

I think I could make him into a consultant. And Bill did incredibly well and decided to go out on his own. And at the time that the letter came to him, he had decided that he was going to hire 2 or 3 lawyers and 2 or 3 medical school graduates to come to Bain And his view was, what I'm going to look for in these individuals is, do they have the intellectual horsepower and drive? Without that, Ryan, that would've been another letter thrown in the wastebasket. I mean, I just wouldn't have got that opportunity. And so it was like finding, for me in retrospect, a needle in a haystack.

Beyond the resume of Harvard Law School, you still had to convince him that you, You were the man though through the interview process. Yeah. Yeah. How'd that interview go?

So it was, it was interesting. You know, he asked me, talk to me about what were some of the hardest things that you confronted. Talk to me about what are the key attributes. Now, in the language of today, he would've said, what are your superpowers? What he was really getting at is, what drives you? What are those capabilities that set you apart? And then he talked to me, I saw you majored in history, and we talked about that. And clearly what he was doing was assessing me to say, is this someone who I think has intellectual horsepower and has drive? He also was, as he said later, analyzing how I thought and how I communicated. And we ended up talking for an hour. And then I met some other partners. I mean, one of the individuals that I ended up working with was Mitt Romney.

Oof.

Mitt had gone to Harvard Law School and Harvard Business School. What I didn't realize then, but I realized in retrospect, is Bain was like a startup. And one of the things that was really attractive, Bill Bain said to me, we're going up against the big boys. We're going up against McKinsey and Booz Allen. And you had this sort of upstart mentality, but also he said to me, look, we're going to throw you in the pool. We're going to give you a few books, but we're going to start you to work right away. And so it was parts trial by fire, parts drinking from a fire hose, but it was exhilarating. I just, you know, I was getting an incredible education and set of experiences that— You know, very frankly, if I had not gotten the opportunity at Bain, I don't think I would've had a business career.

I didn't realize that. I guess the timing, 'cause now Bain is thrown in with Bain, BCG, McKinsey, like they're all the same almost. Maybe they're not, I don't know. But I, I feel a little bit—

They would all say they're different, but yeah.

Right. But I mean, like they all compete for the same thing. They're kind of at the same level. Yes. Right. And so I didn't realize at that point Bain was not at their level.

Bain was like, when I came there, Bain was like 4 or 5 years old.

Wow. So how did they get business? Like how did they become equal so quickly?

It's a great question. So one of the things that Bain was able to do is they started off, they don't do this anymore, but they worked for only one company in a particular industry.

Hmm.

And they worked with the CEO and they went deep. They went— second thing I think they had was And it goes back to this, this, the importance of getting the right talent. Bill Bain was not a bombastic person, but he was incredibly, in his own way, quietly charismatic. And he had the ability to attract highly talented people. And so Bain, even though they were an upstart, he took I think 5 or 6 of the most talented people from the Boston Consulting Group with him. Second is he was able at a number of the business schools to compete with McKinsey and BCG and Booz Allen in hiring incredible talent and then giving them opportunity and In 10 years, Bain was in the early days. I'm sure McKinsey and Booz Allen said they're the upstarts. We don't have to worry about them. In 10 years, Bain was, Bain was a colossus. And it's an incredible story of basically an insurgent getting to the top of consulting and the odds were against it.

Yeah, that's really cool. I'm going to dig into that more after this because I want to, I want to learn more about, because now again, I just lump them all.

No, that I make that point to people that Bain was only 4 or 5 years in existence when I joined.

Wow.

Uh, so it was scrappy. And so you felt, which I always liked, that you were taking on the status quo.

Yeah. One of these lines by Napoleon that I think you like, uh, core leadership line, quote, the role of a leader is to define reality and give hope, right? Define reality and give hope. Can you tell me more about why that's a part of your mantra? Yeah.

I have to tell you, Ryan, is that quote, literally, I think about every day, every single day. I found it in a biography of Napoleon, and I paraphrased it to make it more simple, but I think it's in my mind, one of the single best definitions of leadership. So the way I think about it is it is really hard in different situations to define reality. Defining that reality gives you the credibility, gives people confidence that you understand The tough issues. It doesn't mean you have all the answers, but it means that you are present, you are aware, you're engaged. But defining reality, I use this example, in some cases consultants might define reality, but at the end of the day, that's not enough that you have defined that reality. What are the specific reasons to be hopeful? What are the reasons to have tangible hope? Sometimes that might be a compelling strategy. Other times that might be coming out with a product. But what's important is you've gotta think about in every situation as the leader, what's the reality of the situation I'm in? I need to do some diligence on that. I need to expose myself to people inside and outside the company to really get a perspective on what is really happening.

And then I've gotta develop the tactics, the strategies, the vision to give people the hope that we can move forward. Yeah. And so one of the things that I believe in leadership In general is it's really important to simplify what your mission should be, but that simplicity doesn't make it easier. But what it does do is it gives you focus. If you just think about, look, I gotta define the reality of the situation we're in, and then I have to in fact develop the reasons to be hopeful. Even if that hope, the probability may be 10% or 5%, but here are the reasons why I think it's worth the risk and worth the challenge that we go after it.

Got you. So, and then we're fast forwarding a bit, but I am really fascinated by how people earn jobs, especially big jobs like the CEO of American Express. Could you take me inside the process? Maybe some of the— you mentioned the rewards program, which I imagine probably had to— was a big deal because that's a tangible result. That's a big project, a big deal that changed the company. What was the process like for you to go from like your first job to then the promotions you earned to ultimately the ultimate promotion as CEO of American Express?

So one is, and again, I always caveat, Everybody is different. But for me, I think I was helped by the fact that when I started at American Express, my objective was not to be CEO of the company. It was, I'll stay there for a few years, I'm going to learn. But I didn't have that in my head. For me, I think it's very difficult For an individual, if you set that as the objective, are you going to be operating in a way that's what is best for you or what's best for the company? Are you going to be willing to take some of the risks that are necessary and appropriate that are beneficial to the company and actually are beneficial to you, but if you have that as the solitary goal, you could freeze. And so for me, the things that helped me is what I always tried to do is focus on the job at hand. That was important because that's how you gain credibility. Because one of the things that I realized in my 30s was what were the markers that I was Doing well. To me, the major marker was when someone said to me, Ken, you can make that decision.

Ken, you can handle that. That was even more important than being promoted because it said to me, the hardest thing to delegate is judgment. And so what I was able to do from the beginning is if I was given an assignment, I'd do the assignment, but then I'd try to understand what are the broader implications. And sometimes there were broader implications for the company, not always. And I would go into that and that would present that I was more broad-gauged. I was not just focused on the individual assignment. I would get it done, get it done well, but I also tried to understand the impact On the company overall. Second, I was willing to innovate. And I think being a leader and becoming a CEO, you have to demonstrate the ability to either come up with ideas or to recognize ideas that can really be transformational. And then you have to also be willing To take some unglamorous assignments. So in the company, one of the things that I recognized was that we needed to make some fundamental changes in our business model, and we needed to engage in what we called re-engineering. That means changing the processes, changing the structure of the company.

Most people stay away from those assignments. Because they're high risk. My view was the company needed to do that in order to be successful, and I was going to take that risk in challenging the status quo. Another example would be American Express was known, '60s, '70s, '80s, as basically the card for travel and entertainment. I said, that's not enough. We need to in fact continue to be strong in travel and entertainment, but we need to move into everyday spending. Because if we did not have a strong position in everyday spending, that would allow the competition to come in through everyday spending into T&E spending. And our focus needed to be on getting a greater share Overall of our card members' spending. That was a new concept and that was important. So I was, I was known as someone who was willing to think in a contrarian way, was willing to challenge the status quo, but also had the ability to bring people along and to get it done.

The day the board voted you CEO, I read that Vernon Jordan slid you a folded note. What did that note say?

So let me just give a little background. You know, Vernon Jordan was just an amazing person. He made his reputation as he was a civil rights leader who then was able to move into the business world, which is pretty incredible. He became an advisor to presidents. He was someone that I admired, and he also was someone who believed very strongly that no one gets there totally on their own. They're helped even by unseen people. And so the note read something along the lines of, this is a momentous day. He said he was very proud of me, that our ancestors would be so proud. And then he said something to the effect of that many people struggled so that I could get this opportunity. And then in classic Vernon speak, he said, if I were in church, I would say hallelujah, but the people in this boardroom would think I was crazy. And that was the note. And what was interesting, Ryan, is, you know, I sort of saw by like the 3rd or 4th person, this note going around. And in retrospect, one of the things that was surprising is no one opened the note.

And that was passed to me. I looked over at Vernon and he winked, but it was a really important point.

How did that make you feel?

I would say both proud, but also feeling a responsibility. I think what's important as As a Black person is I know the history and the challenges and what people had to overcome. And one of the points that I make in the book is I was born 3 years before Brown v. Board of Education, which basically ruled that you couldn't separate children on the basis of race. And the realization for me was If I was born 20 years before Brown v. Board, I wouldn't have been CEO. I wouldn't have had any of those opportunities. It wouldn't have mattered how good I was. And so there were many people, both Black and white, who were in the struggle to provide opportunity. And that's really meaningful to me.

I hope you forgive me if this is an ignorant question, but no, did you feel like, um, A lot of pressure, like you're representing your race. I mean, he talks about your ancestors would be so proud. I've never had anyone say that to me. You're making your ancestors proud because of the great— you know, that's just not a thing. I mean, what's that like? Is, did you feel extra pressure?

You know, it's, it's interesting, Ryan, the way I thought about it, you know, I grew up in the midst of the civil rights movement and the Vietnam War protests and the '70s and all of that. It's interesting, people say to me, well, you were a pioneer. I didn't really think of myself most of the time as a pioneer because a number of the basic rights were more established, even though I encountered prejudice in different forms. But what I looked at, and a very successful Black businessman said this to me, is business was the next civil rights frontier. On one level, I saw what I was doing as playing a role that was important. At the same time, I was very clear that I had to perform at the highest level and I had to be viewed as a leader For all people. That was critical. And I would say that I felt the pressure on occasion, but what I tried to do was to say, look, I got to focus on the job at hand. There will be a benefit, I think, to others if I'm successful. You know, there was a term, I can't remember who said it, and I didn't put this term in the book, which is, I think about it, maybe would've been useful.

And this person said to me, sometimes you gotta think about this like there's a black tax and you just have a level of pressure and it may not be fair, but that's just the reality and you gotta deal with it. You know, for me, It did not weigh me down from the standpoint of my feeling that I was under incredible pressure because of that alone.

Didn't Arthur Ashe call you and talk to you about this a little bit, that you were going to be under more scrutiny?

Yeah.

Yeah.

So it's interesting. And again, different people played a role. I mean, Arthur Ashe was a hero to me, the first Black to win Wimbledon and the US Open. I met him at an event and he sort of took me under his wing and told me, and certainly in his case, all the challenges that he had and how he had to be very careful. I mean, I remember one of the things he told me, his coach, who was a Black dentist who wanted to develop outstanding tennis players, Told him, as a Black tennis player, if you're playing against a white player, you should never contest a point. You should never express anger, because if you do, that's gonna set us back.

Wow.

And I was just, whoa. Fortunately, I didn't feel that I was under that burden, but Arthur was a pioneer, a real pioneer. And what happened is I was like 35 years old and I was being interviewed by a business magazine. I can't remember if it was Fortune or Forbes. And I made a statement, sort of an off-the-cuff statement. I believe I can learn anything. And that struck a nerve with Arthur. And he called me and he said, do you know how you sound? And I said, what do you mean? So you sound arrogant. You sound like, you know, you're saying you can learn anything. He said, in his view, he said, as a Black person, people are looking for any reason to discount you. You need to be careful. Now, I really appreciated him telling me that. The way I interpreted it was that I needed a higher level of intentionality. I could not be careless in what I said, but if I needed to challenge something or someone, I was going to do that. But in his mind, and he used this term, obviously being a tennis player, he said, that's an unforced error.

As I thought about it, frankly, initially, Ryan, I was sort of, what are you talking about? Why can't I say that? And he said, because you're going to be looked at in a different way. And I realized in this case he was right.

Do you still feel that way?

For me, no longer. I don't feel that way based on where I am. But I do think that, you know, the reality is I still think there's a black tax out there in some situations and with some people, not across the board on everything. But I, you know, the reality is we still live in a society where the familiarity between Blacks and whites is not that strong. And so, you know, people can have preconceived notions or make judgments on preconceptions.

I think selfishly, this is why sports can be awesome, Ken. I played college football and I came from a high school that just had a couple of Black teammates. And I go to college and You know, 60 to 70% of our team were Black guys, and they're some of my best friends still to this day. It's such an incredible experience being in a locker room, people from all over the country, different socioeconomic backgrounds. There was just nothing better. There's nothing better to learn and to have an open mind and to have great conversations, to make fun of each other, you know, all the stuff that goes into it. Absolutely. It's one of the most beautiful things about team sports, especially football in that case, because it just opened my eyes and changed my life forever because I got to be in a locker room for 5 years with so many incredible people that otherwise I probably wouldn't have met.

Yeah, I think, Ryan, you know, you're absolutely right. You know, one of the things that I also love about sports is you can't program it. You're thrown in with a bunch of folks that, you know, you may be totally different from background beliefs, Race. And there's something that is magic when you have that alignment as a team. It's really special. And it's interesting, you know, one of the things that I've seen, I think one of the most successful organizational units in race relations has been the military.

Hmm.

Aside from team sports. Where, you know, people are sort of just put together and you gotta, you gotta have a common purpose. You gotta have alignment on the values. And this is one of the points that I always make is we should celebrate our differences, but when you are with a group, the reality is there's some values that are non-negotiable if you're going to be a team. And so, you know, I'm not gonna deny or denigrate who you are and where you're from, and that's great, that's terrific. But at the end of the day, if you're not following the process, I'm gonna have a problem with you.

If, if—

I want the team to win. And I think that's something that I've also seen in business of how that comes together, and it's fantastic.

I liked, uh, this story in chapter 12. Uh, you're at lunch in the cafeteria, 'cause I, I like leaders who come up with operating principles. They have a code, they have stuff they believe in. And you wrote these 3 operating principles on a napkin: superior customer value, best-in-class economics, enhance the brand. Tell me about that day and what you did to document the operating principles on a napkin.

Yeah. So, You know, I've always, as I said, tried to boil things down to principles versus a rule book. What I was thinking about is American Express at the time, I believed, had become unwieldy in the sense that we had the payments businesses, we had Shearson, we had Lehman Brothers. I mean, people don't even recall this. We had fireman's fund. And I said, there's gotta be something that we can align against and we actually should reflect on in judging what businesses we should be in and what businesses we shouldn't be in. And so the first one I came up with, and literally this all took place, you know, I've been thinking about it for a few weeks, but it all came I was just having lunch. I was in a corner and I wrote down, we must provide superior value to the customers and clients that we serve. That was important because the keyword superior value, and we had to find ways to measure it, but that was important. The second one was we must do it in a way that allows us to achieve best-in-class economics Because if we have better economics, that allows us to reinvest in the business, that allows us to continue to grow.

So I had the first 2. I said, these are really good, but I really believe that American Express is a brand-driven company and brands are really important. And then I said, everything we do must support and enhance our brand. And I felt I really had something. And I left my lunch, I ran up to see Harvey, who was the CEO, and I said, I really think we need to use these principles to inform our strategies and to inform what businesses we should be in. And already You know, there were some questions whether some of the businesses worked, but it became the framework. We actually took our board through it and then said, here are businesses that we think fit this. Here are businesses that don't fit this. But then very importantly in the organization, we were able to say, okay, let's go through this product. What's the superior value that we're bringing to the customer? How are we measuring that we're doing that? What's the standard that we're holding ourselves to? And I picked best-in-class economics for us, not the lowest cost. Sometimes that's a higher margin, sometimes it's lower cost, sometimes top-line revenue growth.

But I was very intentional that our objective should not always be to be the low-cost provider. In some cases that made sense. In other cases it didn't make sense. But at the end of the day, what you couldn't argue with, we had to deliver the best economics. And then the brand was important. And then someone I'd give a lot of credit to is a person named Shelley Lazarus, who was CEO of Ogilvy and Mather. And she once told me, and I use this line all the time, and that probably influenced me a lot on that third principle. with brands, she said, you should never make withdrawals in the brand bank.

Hmm.

Only deposits. And I love that line. Only deposits in the brand bank, never withdrawals, because your brand is who you are. And I think of brands, you know, Ryan Hawk has a brand, you have a brand, I have a brand. And the reality is Would you consciously do things that were against what you really stand for and what you really believe? And so it all came together.

We started with some love. I got 2 more, and I want to end with some love. You dedicate the book to Kathy, my incredible life partner whose love, support, and sharp intuition have kept me grounded every step of the way. And then also to your sons. But I'm curious, How has having that rock, this great life partner, how has that helped you in your career?

Yeah, I think what's really important— Warren Buffett has said this— that one of the most important decisions you can make is who your partner is going to be. And Cathie is incredibly down to earth. She will speak her mind. She has really good judgment. About people. Really good judgment about people. And, you know, there's a term someone once said to me, you gotta feel it in the fingers. Kathy feels it in the fingers. I mean, she, her perceptiveness and really her intuition is uncanny.

Hmm.

And she does, she does keep me grounded. And that's important. It's a real partnership. You know, it's hard for me to imagine life without her.

How long you guys been together?

We've been together 49 years.

What's the key to that?

The key to that is, one is there's gotta be a deep love. There's gotta be consistent communication. There's gotta be real trust. And then, took me several years to learn this, you gotta have patience.

Love it. One more question. Okay. Let's fast forward to exactly one year from today. So the book's been out for about a year at that point, and you and Kathy and maybe your boys and some of your other friends, you guys are, you're popping bottles and you're celebrating like crazy, right? Spraying it all over each other. I'm curious, Ken, what are you celebrating?

So what I'm celebrating, and I really believe this very strongly, Ryan, is I didn't want to write just a business book. I think that my origin story is relevant to all types of people. And what I think, and I believe strongly, is the importance of character and values in living a meaningful life. And I am concerned that as a society, We're over-indexing on intelligence and success. And let me be very clear, I think intelligence is very important. I think people should strive for success, but it shouldn't be at the expense of character and values. I believe in living a life with purpose. And so if I can get people talking about that, if I can inspire some people, that character and values are so critical. That's what I would celebrate.

So good. The book is called Equal to the Task: A Life Forged Between America's Promise and Its Truth. Thank you for writing it, Ken. I really, really enjoyed preparing for this conversation, and it was even better to get to have the actual conversation with you. I really look up to you, and it was cool to get to learn more from you. So thank you so much. I would love to continue our dialogue. as we both progress, man.

Ryan, I would, I would love it. I, and similarly, I have very much enjoyed this conversation. You're a, you're a terrific guy. I love the sports connection, but I love your focus on leadership and how you talk about it. And you're clearly a person that's living his life with character and values. So thank

you. Thank you. That means a ton. Thank you so much, man. I can't wait till the next one. Thanks, man.

All right. Take care.

It is the end of the Podcast Club. Thank you for being a member of the end of the Podcast Club. If you are, send me a note, ryan@learningleader.com. Let me know what you learned from this great conversation with Ken Chenault. A few takeaways from my notes: write your operating principles on one page and share them with your team. Ken's 3 fit on a napkin, and every decision at American Express was measured against these operating principles. Great leaders document what's most important to them and how they want their team to operate. This not only helped the company, it also helped Ken himself. Next, take on the assignment nobody else wants. Ken took jobs that others warned would derail his career. This reminds me of Carly Fiorina when she told me, run towards the fire. Ken did the same. Those jobs are where he earned the trust that led to the CEO role. Look for the risky project in your company and raise your hand. Next, push on one status quo this month. Pick a process, product, or belief that everyone accepts because, you know, that's how we've always done it here, and test it. Like membership rewards for Ken.

It started as a small team questioning an assumption the rest of the company was already sure about, and it became one of the biggest changemakers for Ken and American Express. Once again, I want to say thank you so much for continuing to spread the message and telling a friend or two, hey, you should listen to this episode of The Learning Leaders Show with Ken Chenault. I think it'll help you become a more effective leader because you continue to do that and you also go to Spotify and Apple Podcasts and you subscribe, you write a thoughtful review, you rate it hopefully 5 stars. By doing all of that, you are giving me the opportunity to do what I love on a daily basis, and for that I will forever be grateful. Thank you so, so much. Talk to you soon. Can't wait.