Kenneth Chenault has navigated American Express through some tumultuous financial waters and still managed to come out ahead.
On the cover: Chenault photographed by Miller Mobley at the American Express Tower in NYC.
History follows many of us around like a second shadow. And while it’s easy to ignore, the smart ones acknowledge—and even invite—its presence. Kenneth Chenault is one of the smart ones. The chairman and CEO of American Express has made a name for himself by sticking to the 164-year-old company’s core values of service, trust and security—even during some of the toughest financial crises in recent memory.
The son of a dentist and a dental hygienist, Chenault grew up in a middle-class area of Long Island. He discovered a passion for history while studying the subject at Bowdoin College in Maine in the early 1970s. After receiving his J.D. from Harvard Law School, Chenault worked short stints at law and management consulting firms before landing at American Express in 1981. A quiet, pragmatic leader, he quickly rose through the ranks of the financial services company, which started as an express delivery firm in 1850 before morphing into the travel and credit card giant we know today.
In 1997, Chenault became president and chief operating officer of American Express, and four years later he took over at the helm. In his decade-plus as CEO, he’s led the company through periods of huge success. It’s currently the largest credit card issuer by purchases—thanks to its affluent membership base—and in 2013 earned a record $5.4 billion in net income.
Happily married with two grown sons, Chenault, 63, wouldn’t be faulted for kicking back a little. Yet he’s busier than ever, guiding Amex through a range of innovative digital initiatives, including a recent partnership with Apple Pay, the tech giant’s new mobile payment service. He still keeps an eye on history, but rather than focusing on his place therein, he’s doing it to inform his company’s future—a point he stressed when we spoke in November.
SKY: What drew you to American Express early in your career?
CHENAULT: I liked that American Express was in the service business. That’s been core to the company from the beginning. Second, it’s a company that’s very focused on ideas and innovation. And what I could see is that it was very involved in becoming more meaningful in people’s lives. Its range of offerings—from travel to the payments business—touches people’s personal lives, business lives and overall lifestyle. I liked that combination. Overlay that with the fact that American Express has reinvented itself over and over. I remember when I first interviewed for the company, I did some research and found out that it started in the freight forwarding business, then found its way into travel, travelers checks and payments.
This year marks the company’s 100th anniversary in the travel services business. Where does travel fit into American Express today and moving forward?
Travel has always been in our DNA but certainly became more pronounced in 1915 when we formally established our travel business. The travel business really leverages the service, trust and security bedrock values of our brand that are relevant when you’re leaving the safety of your home. What I think is critical is that consumer travel is playing an integral role in our company. Look at what we’ve done with our Platinum and Centurion cards and the range of services we provide—we operate one of the largest global full-service travel and lifestyle networks, on- and offline. And we also have a very large retail travel network, with travel councilors around the world. Business travel, too, plays a very essential role.
Talk about challenges you’ve faced in your career and what you learned from them.
Leadership reputations are made or lost during times of crisis. And the way you judge a strong company is really that company’s ability to not just survive crisis but to emerge stronger. I took over as CEO in 2001, and then we had the tragedy of 9/11. We lost 11 of our colleagues in the attack and that was obviously incredibly emotional. The impact on our business was also significant. People really questioned how we would be able to navigate through the downturn in the travel industry and the impact on the economy; spending was in double-digit declines. But American Express had survived a range of crises over the past 150 years, so we focused on the core attributes of the company. We addressed the emotional needs of people, which was most important, but also took tough actions to reinvigorate and position the company for the future. I’m very proud of how the organization responded, and we emerged strong as a company. The other challenge was the financial crisis of 2009. The mantra that I used for the organization at the time was that we had to stay liquid, profitable and selectively invest in growth. Even in the most dire situation, we still focused on growth. I’m proud that American Express emerged from the worst financial crisis in the last 100 years as a substantially stronger company than before the crisis.
As an African American CEO, do you feel pressure to be a role model?
I believe strongly in the importance of being a role model in our company and in society in general. At the end of the day, corporations have an obligation to make a positive difference in our society, because corporations exist because society allows us to exist. Corporations have a public trust, and it’s important that companies live up to that trust.
As the payment industry embraces mobile innovation, does plastic matter anymore?
I couldn’t care less if plastic goes away. The form factor is irrelevant. Our core attributes are actually more meaningful in the digital age. When the Internet really exploded, some questioned whether brands would be important, but brands became even more important. American Express has the largest global, integrated payments platform in the world. That means we’re involved in every aspect of the payment process. What’s really exciting is the convergence of the on- and offline worlds—there’s a tremendous opportunity for growth there. We’ve developed partnerships with Apple Pay, Facebook and Uber—you can now redeem your membership reward points on Uber. We are leveraging our data to create more personalized offers for customer needs. We also want to become an even more welcoming and inclusive brand, so now we offer Serve and Bluebird [prepaid cards] for the nonaffluent customer. Overall, I think that our business model will be more impactful going forward than it was in past.