Club Overview:
The Economic Club of New York is a leading forum for discussion on economic, social, and political issues. The club is committed to bringing people together to promote conversation, innovation, and inclusion. The club’s Focus on Racial Equity series aims to explore racial inequity and provide strategies for change.

Kenneth Chenault:
Chairman and Managing Director of General Catalyst, a venture capital firm. Former Chairman and CEO of American Express Company, where he built a world-renowned customer loyalty program. Recognized as a business leader and expert on brands and brand management. Serves on the boards of several notable companies and nonprofit organizations.

Conversation Focus:
The discussion will center around Ken Chenault’s experiences with racial injustice and his perspective on corporate leadership and global business.

Maggie Jose Kravis:
Economic Club of New York Chair Emerita and Senior Fellow at the Hudson Institute. Will lead the conversation with Ken Chenault.

Key Themes:
Racial injustice and the impact on individuals and society. The role of corporate leaders in addressing racial inequity. The importance of diversity and inclusion in business. The future of global business and the challenges and opportunities it presents.

Personal Experiences with Race:
Kenneth Chenault was born three years before the landmark Supreme Court decision of Brown v. Board of Education, which outlawed racial segregation in schools. He experienced racial epithets and prejudice throughout his life. Even as CEO of American Express, he faced bias, such as being mistaken for his white colleague.

The Black Tax:
Chenault refers to the “black tax” as the extra burden that black people face in society, including the need to constantly be aware of and overcome bias. He emphasizes the importance of having a clear-eyed perspective and not being pulled down by acts of bias.

Influences in Dealing with Prejudice:
Chenault grew up during the civil rights movement and was inspired by leaders like Martin Luther King Jr. and Malcolm X. He also admired Nelson Mandela for his ability to overcome 27 years of imprisonment and thrive. Chenault had mentors in school, including teachers, coaches, and the headmaster, who provided him with guidance and support. In business, he was influenced by leaders such as Harvey Golub, Lou Gerstner, Jim Robinson, Vernon Jordan, and Franklin Thomas.

The Need for Diverse Workforce:
Chenault believes that the current discussion about the need for businesses to recruit, mentor, train, and retain a more diverse workforce is different this time. He is hopeful that businesses are genuinely committed to creating a more inclusive workplace.

Cautious Optimism for Change:
Chenault acknowledges recent events like the murders of George Floyd, Ahmaud Arbery, and Breonna Taylor have sparked a reassessment of race and racism in America.

Talking About Race:
Chenault emphasizes the importance of addressing racism and systemic racism in all types of forums, highlighting America’s discomfort with discussing race-related issues.

Focus on Long-Term Actions:
Chenault stresses the need for long-term actions to address racial issues, encouraging CEOs to initiate conversations on race, learn from experiences, and make changes in their organizations.

Individual Accountability:
Chenault emphasizes individual accountability in challenging biased statements and actions, both in personal and business life, and calls for proactive action rather than complacency.

Roy Vagelos’ Example:
Chenault cites the example of Roy Vagelos, former CEO of Merck, who took personal responsibility for mentoring Ken Frazier, a lawyer, to address the lack of diversity in Merck’s workforce.

Diversity Makes Corporations Stronger:
Chenault believes some CEOs recognize the benefits of a diverse workforce and its positive impact on business overall.

Integrating Diversity into the Company Fabric:
Chenault emphasizes the need for CEOs to integrate diversity into the entire fabric of their companies, treating it as a challenging business issue requiring innovation, tactics, measurement, and accountability.

Pipeline Issue:
Chenault criticizes the “pipeline issue” as a cop-out, stating that CEOs control what goes into the pipeline and should vary their approaches to attract diverse talent.

Handful Strategy:
Chenault proposes the “handful strategy,” where a few diverse individuals are brought into key positions, leading to a broader increase in diversity across the company.

Understanding the Core Values:
At the heart of a successful company lies its core values. For American Express, this core value was service, guiding its transformation and evolution.

Beyond Form Factors:
Chenault emphasized the importance of not being wedded to specific business models or form factors. American Express’s card was viewed as a platform to deliver services, and its evolution with digital transformation was crucial.

Growth and Metrics:
Chenault focused on driving growth and setting appropriate metrics. He recognized the need for American Express to capture a greater share of card member spending and diversify beyond travel and entertainment spending.

Leading in a Crisis:
Chenault’s leadership mantra was to define reality and give hope. During the financial crisis, he emphasized staying liquid, maintaining profitability, and selectively investing in growth.

Communicating with Employees:
In times of crisis, leaders must give employees a sense of understanding and focus. Chenault communicated the reality of the situation and provided signposts to track the company’s progress, such as monitoring trade-downs and customer retention.

Selective Investment:
Amidst the crisis, Chenault identified areas for selective investment, such as commercial payments, to instill hope and demonstrate a commitment to the company’s future.

Conclusion:
Kenneth Chenault’s leadership during American Express’s transformation and various crises showcases the importance of understanding core values, adapting to changing business landscapes, driving growth, communicating effectively with employees, and making strategic investments during challenging times.

Traits of an Effective Leader During a Crisis:
Communicate a sense of urgency and purpose. Demonstrate empathy and understanding. Make quick and decisive decisions. Be forceful and decisive while remaining empathetic. Gain the hearts and minds of your people.

Applying These Traits to the Current Pandemic:
The pandemic is an unimaginable crisis that requires a different approach to leadership. Emphasize the safety and security of your people. Maintain constant communication. Set the context, communicate uncertainty, and provide signposts. Invest in growth and innovation. Communicate about remote working and safety protocols.

Lessons from Previous Crises:
The lessons from the financial crisis and 9-11 are still relevant today. Leaders should be prepared to make tough decisions. Communicate frequently and transparently. Address both the practical and emotional needs of your people. Stay resilient and focused on the long term.

Responding Quickly to Poor Performance:
Acting quickly when necessary, even if it’s difficult, can prevent substantial damage to an organization. Moving quickly on poor performers while being respectful and thoughtful can help mitigate negative impact. Sometimes 60-70% of the necessary information is enough to make a decision and move forward.

Prioritizing Value, Brand, and Speed:
Providing superior value to customers and clients is essential for long-term success. Measuring and delivering best-in-class economics is crucial for business sustainability. Supporting and enhancing the brand must be a driving force behind all actions and decisions. Speed is vital in decision-making and execution, especially in rapidly changing environments.

The Importance of Responsible Innovation:
Companies should focus on responsible innovation that considers the broader impact on society and the environment. Technology has the potential to bring about fundamental changes and improvements in various sectors. Companies should strive to build enduring businesses that are not solely focused on short-term financial gains.

The Guild: Workforce Education Transformation:
Workforce education in America needs to be transformed to create upward mobility for individuals. The Guild is a marketplace platform that connects employees, corporations, universities, and trade schools. Guild’s technology and coaching approach have led to significantly higher completion rates and lower student debt. The platform offers diverse offerings, including white-collar and blue-collar programs, increasing opportunities for underrepresented groups.

Technology’s Role in Creating Fundamental Changes:
Technology can be a catalyst for positive change across various sectors, including healthcare, education, and online commerce. Technology-driven models can provide cost-effective solutions while addressing social and economic challenges.