AmEx's Ken Chenault Talks about Leadership, Integrity and the Credit Card Business

• By Knowledge@Wharton
• Jun 3, 2005

This article is provided courtesy of Knowledge@Wharton.

According to Kenneth I. Chenault, chairman and CEO of American Express, adaptability is one of the keys to company success in the rapidly changing terrain of the global marketplace. Applying Darwinian theory to the business domain, he told a Wharton audience on March 17 that "it's not the strongest or the most intelligent who survive, but those most adaptive to change. Over the past 10 years, the need for, and focus on, adaptability has accelerated."

Chenault himself is busy carrying on AmEx's 154-year tradition of continually reinventing itself. "With the politically tough environment of world affairs, we are in a more chaotic time than perhaps ever before. It's critical for a global company to balance its resources and to have people who understand different cultures" and can act quickly in changing circumstances, he said. Chenault cited a recent survey that asks CEOs what marketplace issues will have the biggest impact on their businesses. "The leaders are more concerned with the external issues of world affairs than they are with the economic environment," he noted. "That's a major change from even three years ago."

A second key element of survival is leadership. "Many companies are struggling, and American Express is by no means perfect," said Chenault. "Any company, no matter how strong, is going to experience some difficulty. The question is, how do you develop leaders to manage in these times, how do you retain them and how do you excite them? That will be a continuing challenge for American Express and others."

Chenault believes that it's a lot easier to be a good leader in good times than in bad, but a reputation for leadership over the long term is established during times of change. "Today, the stakes are incredibly high. The need for leaders to stand for something and act from principle is more important than ever. Things that were acceptable five or ten years ago will today cost you your career. You can make a few mistakes, not a lot ... a few. But if your people believe that you have the right values, they will tolerate a few mistakes. In fact, they will stay with you. They want to see that you are decisive and compassionate, because you are asking people to take risks, to take chances. But don't confuse compassion with a reluctance to act decisively when necessary.

"There has always been a focus on the rational aspects of leadership and the intelligence required of leadership," he said. "I think it's absolutely essential. But what I have seen in companies throughout my career is that if you are not clear on who you are, on what it is you stand for, and if you don't have strong values, you are going to run your career off a cliff."