00:04it's my pleasure to introduce uh today's
00:07speaker but before I do that I want to
00:09acknowledge that this is our final uh
00:11vft for the year and it's the ronac
00:13Desai Memorial talk uh ronak was a
00:16member of the MBA class of
00:182010 and we're joined today by several
00:21of his classmates and friends as our
00:23special guests um R was a remarkable and
00:27accomplished individual and as a student
00:30leader of the view from the top series
00:31he was passionate about exploring how
00:33prominent leaders who run some of the
00:35world's most influential Enterprises can
00:37truly impact the lives of millions he
00:40recognized that each of these leaders
00:42have their own personal story their own
00:44values and their own ideas about how to
00:47happen his desire to learn from these
00:49individuals was motivated by a
00:51commitment uh to to reflecting on his
00:53own personal leadership story he aimed
00:56to leave a positive and significant mark
00:57on the world but he wanted wanted to do
01:00so in a way that was consistent with his
01:01values to this end his talent and
01:03ambition was always complimented by his
01:06extraordinary warm spirit and his uh
01:11Humor after Ron's untimely death his
01:14classmates asked if we could dedicate
01:15one talk each year in his memory this
01:18year we thought it was only appropriate
01:20uh to invite Ken Chanel to give this
01:23special talk as ronak interviewed Ken
01:25when he was last here in
01:282010 in the spirit of of today's talk I
01:30encourage you to reflect not only on our
01:32speaker and the company that he runs but
01:34what his experience and the experience
01:36of all of the speakers uh in our series
01:39can teach you about your own role and
01:42potential as a leader I hope and I think
01:45ronak would also hope that this
01:46reflection helps you set your sights a
01:48little farther challenge yourself a
01:50little bit harder and to challeng and to
01:53think more a bit more deeply about what
01:54it means to pursue a life of meaning and
01:57impact while staying true to yourself
01:59and the things things that you value as
02:01a tribute to ronac before we begin
02:04please join me in a moment of
02:17silence thank you so now I'd like to
02:20welcome and introduce Ken Chanel the
02:23chairman and CEO of American Express Ken
02:26has been in amer American Express for
02:28more than 30 years having joined the
02:30company in its strategic planning group
02:331981 before this he worked as an
02:36associate at Roger and Wells after
02:37graduating from Harvard Law School and
02:39worked as a consultant at baning company
02:42he was promoted to president and coo at
02:44American Express in 1997 and was named
02:482001 American Express or AMX founded in
02:521850 as a Fortune 100 Diversified
02:54financial services company with more
02:56than 30 billion in Revenue it's one of
02:58the 30 companies that make up the Dow
03:00Jones Industrial Average and is best
03:02known for its credit card charge card
03:04and travelers check business in indeed
03:07AMX accounts for roughly 24% of the
03:10total dollar volume of credit card
03:11transactions in the United
03:13States much of their success stems not
03:15from an individual product however but
03:17for their long-standing prowess in
03:19consumer marketing that I'm sure you're
03:21well aware of membership has its
03:23privileges don't leave home without it
03:26these are just a couple of taglines that
03:28have really entered the American
03:30cultural lexicon and as a result
03:32American Express is truly one of the
03:34best known brands in the world today and
03:37is consistently ranked among the world's
03:39top 25 most valuable
03:41Brands another reason the brand is so
03:43valuable is amx's commitment uh and
03:45reputation for customer service in 2012
03:48JD Power ranked amx's highest for
03:50customer satisfaction among card issuers
03:52for the sixth straight year Fortune
03:54recently listened as one of the 15 most
03:56admired companies in the world Ken chal
03:59and his team have certainly uh played a
04:01critical role in building and
04:02maintaining this strong
04:04brand when Ken was here in 2010 he
04:07talked about leading his 65,000
04:09employees through the many challenges
04:11the company's experienced during his
04:12time as CEO saying clearly my tenure has
04:15been one of confronting some of the most
04:16challenging crises that we've seen in
04:19the last 10 years I take my model from
04:21Napoleon make sure people are grounded
04:23in reality and give them strategies to
04:27hopeful Ken's made an impact well beyond
04:30is currently co-chair of the Business
04:31Roundtable he serves on the board of IBM
04:34is a member of the Council of foreign
04:36relations and has received many business
04:37and Civic Awards Ebony magazine named
04:40him one of 50 living Pioneers in the
04:42African African-American Community
04:44having been only the third
04:45African-American to run a Fortune 500
04:48company today Andrew Baldwin one of our
04:51second-year student leaders from the
04:52view from the top team is going to
04:53interview Ken and so please join me
04:55today in wel in welcoming Ken Chanel to
05:11so what seat do you want me in I'll
05:20right so thank you very much for coming
05:23today um when I found out that I was
05:25going to get the chance to interview you
05:27I was thrilled and it took me back to
05:28the first time that I interacted with
05:30American Express the brand I would just
05:33graduated from college and I was moving
05:34from Indiana to New York and when I got
05:37to New York I found out that New York's
05:38a little more expensive than I thought
05:40so as any responsible 22-year-old I
05:42applied for my first credit card it was
05:44a Visa and they gave me that was the
05:47first mistake that was the first mistake
05:49the only mistake I've made since um and
05:53they gave me a credit limit of $1,500
05:55and I told a friend this story he said
05:57you're an idiot for not getting an
05:58American Express so the next day I
06:00applied for American Express and
06:01American Express gave me a credit limit
06:05$25,000 when I look back I can only
06:07think that you personally thought that I
06:09was 16 times more valuable than Visa day
06:12so hopefully I can repay some of that
06:14appreciation through this talk thank you
06:17I want to start out the interview with a
06:19very similar question to what ronic
06:21asked during his 2010 interview you've
06:24LED AMX through a pretty incredible time
06:27right after you joined a c or right
06:28after you became C o 911 occurred and
06:31then you also were the head of a
06:33financial services company during the
06:35worst Financial downturn in 80 years and
06:37kept your job which is no small feat can
06:40you walk us through the one or two days
06:42that were the biggest tests or the
06:44largest challenges certainly first uh
06:47just let me say it's it's a real honor
06:49to uh be here and obviously uh I
06:54remember ronac very vividly and was just
06:57impressed with both his his
07:00authenticity and his humility uh so it
07:03means a lot for me to be here we really
07:05appreciate it so let me just say that um
07:09obviously 9911 uh and the financial
07:12crisis were absolutely incredible I
07:15would say the most horrible obviously
07:18was 911 from a from a emotional
07:21standpoint because we lost uh 11
07:24employees and uh the loss of human life
07:31tragedy what was most important there
07:38organization to understand both the
07:41reasons uh why they should be helpful uh
07:44but also dealing with the reality that
07:48the travel industry uh was in total
07:53disarray uh spending on our credit cards
07:58dramatically and and what I recognized
08:02transform the company uh in a relatively
08:06short period of time and uh that leads
08:10me to one of I think the real challenges
08:12from a leadership standpoint is how to
08:14be decisive and compassionate So
08:23911 I decided that we had to
08:26substantially change our cost structure
08:29which meant that we were going to have
08:32employees and uh many uh people in my
08:37top executive team uh said this is not
08:40the time to do it and from an emotional
08:42standpoint they were absolutely right
08:45the concern that I had was that the
08:47future of the company was at stake and I
08:50said we have to do this in a
08:51compassionate way with our employees but
08:54we have to do it and what I believe very
08:58strongly that one of the things you got
08:59to do in leadership is you need to tell
09:02people both the truth and you don't talk
09:05down to people and you explain to people
09:08the reasons why and I'll cut to the
09:11chase just to simplify so we can also
09:13talk about the financial crisis is what
09:16I explained to people were the reasons
09:19why what was happening to the company
09:22and at that time uh we always do a
09:26employee survey and a third of our
09:29incentive compensation is really based
09:32on the satisfaction and engagement of
09:35our employees because we really do
09:36believe in the surface surface profit
09:38chain and people said Ken if you're
09:41going to lay off uh basically 12% of the
09:45workforce the last thing you want to do
09:47is to do a survey on it and I said not
09:50only are we going to survey the
09:51employees but we're going to survey the
09:53people that we laid off um because from
09:56a leadership standpoint everyone has to
09:58be held accountable and I think
10:01partially because of the times that we
10:04were in with 911 but also the leadership
10:07and the way that was done weed the
10:10highest employee survey scores that we
10:12had in years so that was very much a
10:14turning point for the company and then
10:17frankly one of the most exciting things
10:18for me was over the last 5 to 10 years
10:23is in fact to see some of those
10:25employees come back to the company
10:28because of the growth to the company and
10:31happening the financial crisis was very
10:35different on one level uh it didn't have
10:38the the emotion of the loss of human
10:41life but you really felt that you were
10:45falling off the cliff and in a crisis
10:49what I think is very very important and
10:51where it really hit me uh was when
10:55Congress uh voted against tarp uh and uh
11:00I vividly remember my son is now a
11:02junior in college calling me and saying
11:06dad everyone says that the company's
11:10going down and you're going to be fired
11:12and I said Kevin it's not going to be
11:15that bad um uh don't worry about it uh
11:19but the reality is uh that represented
11:22the fear because to me when messages
11:25permeate the playground you know this is
11:28really serious ious uh that there are
11:31real problems and for us where we were
11:34impacted is we were very reliant on the
11:37wholesale funding model so we did not
11:40take deposits and so literally over a
11:43weekend and this goes to the power of a
11:46brand I said we've got to get into the
11:49deposit business and both inside and
11:51outside the company people said you know
11:54given what's going on with financial
11:56services companies and the environment
11:59there is no way you're going to get this
12:00up and running the only way we could do
12:02it was in fact to work with third
12:06parties so we in fact work with other
12:08financial services companies to to
12:11basically sell our deposit
12:14products and um I then put together a
12:18mantra for the company uh because I
12:20wanted to have all 60,000 plus employees
12:23focused on what we needed to do and it
12:25was really simple stay
12:27liquid stay profitable and then the Hope
12:31Port was selectively invest in growth so
12:34even in the most challenging times I
12:36wanted to reinforce that we were not
12:38going to take our eye off the ball of
12:41really being focused on growth but
12:43staying liquid was critical and
12:46fortunately within around 30 days we'
12:52raised around 8 billion in deposits we
12:54now have over 40 billion in deposits
12:58that gave me me a lot of Hope and gave
13:00the organization and the company a lot
13:02of Hope because I said why would people
13:05be putting money in with us if they
13:08thought we were going out of business
13:09number one number two we were able to
13:12stay profitable that was critical third
13:15was what I also looked at as far as cons
13:17customer Health was how many customers
13:20traded down from our more expensive
13:23products to less uh priced products and
13:27the reality is almost zero and we had
13:31hardly anyone who left the franchise
13:34that gave me a lot of confidence then
13:36the third thing that we were able to do
13:38back to the Mantra is we were very clear
13:41to people in the company where we were
13:43investing and that allowed us uh to come
13:47out of the crisis frankly really roaring
13:51so the momentum of the company was very
13:54very strong and my experience frankly
13:57over 30 years is what what you see with
13:59companies is it really is what happens
14:03uh during a crisis is how do companies
14:06act how balanced they are the majority
14:09of companies in fact Hunker in the
14:13bunker uh don't really have a broader
14:16perspective don't focus on growth and
14:18then generally two to three years after
14:20a crisis you start to see this
14:22demarcation uh that's caused and that's
14:24exactly what happened for us fortunately
14:27we were on the positive side of that and
14:29speaking of a lighter note o over those
14:3130 years and even maybe more
14:33specifically over the last 12 as CEO is
14:36there one day that you look to and
14:37you're like man that is the day why I
14:40that's the reason why I do this this is
14:42a great day this is kind of what gets me
14:45excited and and and just um passionate
14:48about the business is there one day
14:49you'll look back to I I would say
14:51literally there uh fortunately are
14:54hundreds of days because my view in
14:56business is if if you're not having fun
14:59it's not worth it but I'll give you one
15:01example that again uh was a tragedy but
15:05uh gave me a lot of pride is um I think
15:09everyone certainly remembers the
15:15and you've got the problem and me um my
15:19second mistake that's right and and and
15:22and the reality was that uh our
15:25employees around the world with
15:28literally no instructions from Top
15:31management did incredible things to
15:35serve people uh and that just gave me
15:39incredible Pride because when people
15:41feel empowered to make a difference and
15:45literally um make up policies on their
15:49own but it was because they really
15:52believed in the service Mission and the
15:53service ethic of the company uh that's
15:56where I felt great but fortunately I
15:58have literally hundreds of examples like
16:01that uh that make me feel great about
16:03being at the company you're making my
16:04transitions really easy to the next
16:06question so the next question is
16:07actually about customer service when I
16:09think about American Express I think
16:10it's the gold standard of service and in
16:13fact you've taken a really boring piece
16:15of plastic and turned it into a club
16:17that has a cult following this room is
16:19full of aspiring entrepreneurs or
16:21managers who want to build equally great
16:23Brands equally great service cultures
16:26how did American Express do it and what
16:28would you what knowledge or advice would
16:31you provide to them yeah here's what I
16:33think is very very important in building
16:35a brand is uh if you think
16:40about what are the attributes of the
16:44Brands brands are really about bringing
16:48a rational and emotional connection
16:52because the best brands have a personal
16:56engagement and the best brand and the
16:59brands that are really long-term are
17:01those brands that in fact have what I
17:04call a higher purpose that it's more
17:07than just selling a product uh that
17:10you're changing people's lives you're
17:12impacting people's lives uh you're
17:15allowing people to have fun and when you
17:18have a brand that combines that rational
17:21value proposition with a emotional
17:24connection it's really powerful what
17:26people forget because the card has been
17:30successful is the company started off as
17:33a freight forwarding company and what's
17:36critical is the reinvention of the
17:38company over 163 years one was that
17:42commitment to service was really
17:44critical the point I make about our
17:47Travelers check business uh is that it
17:52requirement uh anyone could get it it
17:55was used all over the world that helped
17:59the brand allowing us to offer a card
18:02right now part of what I do particularly
18:05with the Partnerships that we have with
18:06a number of digital companies I say the
18:09form factor is irrelevant the reality is
18:14card as a platform to deliver service uh
18:20so what's important is that you've got
18:22to understand to create a brand you need
18:25a core Mission and for us
18:29uh we want to be the most respected
18:30service brand uh Trust of the brand is
18:34very critical service is very critical
18:38security is very critical um and then
18:42what you've got to do is constantly
18:45innovate uh because if you want to be a
18:49leading brand you've got to innovate in
18:51the market place all the time uh and
18:56what I would also emphasize with respect
18:59to service is what I found is and I say
19:02this publicly and um certainly I'm very
19:06competitive I want to win uh so I don't
19:10foolishly give out Secrets but the
19:13reality is that most companies don't
19:15want to make a commitment to service one
19:18is because it's a long-term investment
19:22two is they don't have the right metrics
19:24in place to know they're getting the
19:27returns we in fact know what service
19:31interactions will generate levels of
19:34spending uh we know what will drive
19:37retention and loyalty of our customers
19:40and one of the things that we did in our
19:42service despite the fact that uh for
19:45years we had great service around 10
19:48years ago we said we're going to revamp
19:50it we're going to reinvent the way we do
19:52service we think people are too robotic
19:56we think we're too rule focused and we
20:00want to empower the people who are
20:02serving our customers whether that's
20:05offline uh and we literally changed
20:08fundamental aspects uh of our service
20:13and that leads to a very important point
20:16which I believe in strongly is you
20:18always want to create the company that
20:20will put yourself out of business uh
20:22that's the way you constantly need to
20:24think and if you believe that you're
20:28and you get arrogant about that success
20:31that success becomes a
20:33rut specifically on one service point I
20:37love your custom customer service
20:38Representatives so much so that I
20:40probably confide in them more than my
20:42own parents sometimes and they are
20:44consistently and always friendly what
20:47what's the secret training or
20:49recruitment process that you use to
20:51always have that consistency because I
20:53actually view that as a pretty big
20:55competitive Advantage it's a big
20:56Advantage you know here's here's here's
20:58the simple answer to that and um it took
21:02us a while to get there his attitude
21:06makes a difference is actually hire
21:08people who like to serve people that is
21:12a stunning Insight uh I mean give me a
21:15break uh um and so you in fact can
21:19interview people you can test people you
21:23can assess people who really do have the
21:27attributes and have the
21:29desire uh to serve and really enjoy it
21:34there are some people in fact uh when I
21:37talk to even senior people and I
21:40interview them and I talk about Service
21:42as a higher purpose I get some people
21:45say hey that's not a purpose for me it's
21:48not a higher purpose for me that's fine
21:50then I don't want to hire you uh because
21:52at the end of the day You've Really Got
21:54to Believe In what the core mission is
21:57but but attitude really does make a
22:00difference and you can interview you can
22:02assess for it uh you can Empower people
22:07uh but uh sometimes companies get so
22:10bogged down in policies and rules that
22:15for us uh as terrific as we were
22:19historically as a service company we did
22:21not explicitly enough focus on the
22:24attitude of people that we were hiring
22:27and now over the last 20 years our
22:30retention rates our customer SAT scores
22:35are off the graph and our service levels
22:37are really strong because we have people
22:39who really enjoy serving people and not
22:44does a couple weeks ago Jack dorsy was
22:47on the stage here and he was talking
22:48about kind of the shift in almost
22:51Commerce and payments and absolutely
22:53that everything from how we buy where we
22:55buy what we use to buy is going to
22:56change and he talked about squares
22:58ewallet how does a company that's been
23:01around for 163 years kind of fit in with
23:04this model and are we are we going to
23:06stop carrying credit cards uh we could
23:09and frankly I don't care uh because it's
23:13really what's behind the card so Jack uh
23:16actually talked to before he started
23:19Square uh we work with square uh they
23:22acquire a lot of merchants for us what I
23:25think is absolutely terrific is that
23:28Jack is empowering uh small Merchants uh
23:33and really helping small business we are
23:36the largest provider to small business
23:41uh so the Synergy is really strong what
23:44I think is important and the way you
23:46change is I believe Commerce is changing
23:51dramatically and uh the way I talk about
23:54our company now is that part of our
23:56objective is bringing buyers and sellers
24:00together and uh the advantage that we
24:03have and this is an advantage that Jack
24:06recognizes and I give him a lot of
24:08credit for is square is built off an
24:12existing payments infrastructure that's
24:17Advantage so he has been Innovative what
24:20he hasn't done is to say I got to change
24:22everything that's one of the reasons why
24:23I like the mobile app Uber because
24:26they're building off off an existing
24:29platform and they're innovating and
24:31changing the payments experience so for
24:34us what we've said is we have a major
24:36major advantage in that we are the most
24:40integrated payments platform of anyone
24:45Merchants we process Merchant
24:48transactions we are an issuer and we
24:51authorize transactions all over the
24:53world there is no other card company no
24:56one in payments who has a fully
24:59integrated payments model we're the only
25:01one now what that does is we talk about
25:04a closed loop and that means we have
25:07information on the enduser customer and
25:11merchant and the ability to do modeling
25:16and algorithms with that
25:19data is going to give us frankly an even
25:23bigger Advantage going forward than in
25:26the past because the convergence of
25:31unleashes the assets and capabilities
25:33that we have in the platform so part of
25:36what we started to do almost a decade
25:39ago was to say we really are going to
25:45transformation and what we've done is
25:47with existing people in the
25:49company uh people have really been able
25:54weren't uh are no longer with the the
25:58company uh because the reality is that
26:01they had to keep up with the change what
26:03I've also done is bring in people from
26:06outside the company and have a mix and
26:08match so we promote probably 60 to 65%
26:12of our people from within but we also
26:14bring in people from the outside and
26:17I'll give you one way that I dramatized
26:20board is I had a voice over uh of
26:24someone talking about what the brand
26:26meant to them and they talked about MX
26:29and Trust security service
26:33reinvention and then as you pan down you
26:36saw the nose earring and the earrings
26:38and the tattoos and I said welcome to
26:41the new American Express because the
26:47reinvention is critical uh so I think
26:51that uh the assets are there the
26:55Partnerships um I'll just mention one
26:57that I'm excited about uh with Twitter
27:00where we're using our uh closed loop
27:04platform uh where you can do tweet to
27:07buy we're the only ones that can do that
27:09with Twitter so when it was announced
27:11all these folks were calling up Twitter
27:13and saying we we'd like to do the same
27:15thing and Twitter responded the problem
27:17is AMX is the only one who has the
27:20platform uh so clearly there'll be
27:24people and there's a lot going on
27:26there's more innovation going on right
27:28now in Commerce and payments than almost
27:31any place else but we're not standing
27:34still staying with the theme of
27:36innovation I want to Pivot to policy
27:39right you're on the president's Council
27:41for jobs and um in competitiveness I was
27:44it's no longer in existence but I was
27:47and if we were to treat the president or
27:51the United States as one of your
27:53customers who's over levered um
27:56hypothetically what advice advice would
27:57you give on kind of current deficit
28:00levels how to manage um you know
28:02increasing debt levels over time so
28:06obviously with the proper service
28:08training I do it in a very uh polite but
28:11forceful way um but in all
28:15seriousness I think what is uh most
28:18important and and from my experience on
28:20the jobs Council I went in uh
28:25questioning how much of a difference
28:27could be made in creating jobs I
28:31actually um believe that the jobs issue
28:36is a solvable issue uh we did a lot of
28:42identifying different industry areas
28:45where we can drive growth putting
28:47together both short and long-term
28:49strategies obviously you get down to
28:52politics and getting that through on
28:54both sides of the house uh but but the
28:58reality is that uh I think there's
29:01several things that need to be done uh
29:04one is uh we do have to promulgate some
29:10policies uh when I look at the
29:13infrastructure in the
29:15US uh there are major improvements that
29:19have to be made that can help stimulate
29:22job growth but also can make us a more
29:25productive and competitive
29:29economy secondly we have to deal with
29:33entitlements uh that's just the reality
29:36and so back to your analogy of someone
29:40who is having credit problems you got to
29:43sit down and you got to say here's the
29:44spending that has to
29:46stop uh but thirdly I think what's very
29:50important is that tax reform in a
29:54comprehensive way both personal and
29:58corporate uh we've got to really bring
30:01about a set of fundamental
30:04changes and I think that what is
30:08required is not just an issue of being
30:12focused on what the president the Senate
30:16does I think we need to put more public
30:19pressure on and I look at this frankly
30:24as almost like a social movement that
30:28um your generation the Next
30:32Generation your lives are in
30:35Jeopardy if you really felt that on a
30:39social issue I think you would have a
30:42much different attitude and approach and
30:45I think we need a far more engaged
30:49electorate uh that is going to put real
30:52pressure uh because the existing
30:56approach is not driving change fast
31:00enough that's great feedback and from
31:03what I understand about American
31:04expresses culture you have a culture of
31:07constructive confrontation and
31:09transparency and here at the GSB we have
31:12a euphemism that feedbacks a gift um
31:16could you share with us a story when you
31:18had to give or receive one of these
31:20gifts that's not so pleasant sure
31:23sure um I I would say probably
31:3034 uh through my career uh things were
31:34going really well um I thought I was uh
31:40uh getting terrific feedback which in
31:43was um and we had this process where uh
31:48you got feedback and there were always
31:5010 things that you did really well and
31:53then 10 things that you needed to
31:55improve and it didn't matter who you
31:58were you always had 10 things that you
32:00needed to improve um because if you was
32:03no matter what your station you should
32:05always focus on being a good leader so
32:07it was always depressing particularly if
32:10you're really focused on saying I want
32:12to be the best to confront that there
32:15are things you got to focus on then we
32:17started to say well what are one or two
32:20things that you need to focus on and in
32:22our feedback process you had to talk to
32:27here are the things here are the things
32:28that are positive here are the things
32:30that are negative and um so one thing
32:33that came out with me is uh that I
32:39well and um I actually thought gez I I
32:44am respectful for people I sit in
32:46meetings I listen to people and the
32:49feedback I got was Ken you know your
32:52mind's always racing and if you don't
32:54think someone is saying something that's
32:57really smart you literally will just
32:59turn off uh you won't frown but we know
33:04that you are not there that's not what's
33:06going on here right between us not at
33:08all not at all um and uh that really
33:13that really hit me I mean I didn't fully
33:16realize I was doing it and didn't really
33:18realize not just the impact that was
33:21having on the person that I was talking
33:24to but obviously the impact that had in
33:27the entire room uh because at that time
33:29I wasn't president but I was a pretty
33:31senior person and uh you know almost the
33:35phrase was you know this is one of Ken
33:37Zone outs uh and he's thinking about
33:40else and one of the things that I
33:44clearly learned from that
33:47feedback was that I was missing out it
33:50doesn't mean that every time someone was
33:52talking to me I thought they were saying
33:53something that was really terrific uh I
33:55would certainly let them know I don't
33:57think that's a great idea here are the
33:59reasons why but I was actively engaged
34:02and um you've got to have that two-way
34:05street and if you listen some
34:08more uh those ideas can come out so the
34:13the ability to be what I call an active
34:17listener can actually Empower that
34:20person who you're talking to that was a
34:24real learning for me it was incredibly
34:27and it took several years before I got
34:30the recognition that I was an active
34:32listener now people say boy Ken is a
34:34really good listener um someone who's
34:37been in the company a long time I say
34:38well let me tell you about Ken 10 or 15
34:40years ago he wasn't such a great
34:42listener so that's but I think for
34:45anyone one of the things that I try to
34:47do really every year is think about two
34:51or three areas that I want to improve
34:54going forward in my own leadership uh um
34:57so I'm going to lean in for this next
34:59question right um I know that you are
35:03very close friends with Cheryl Samberg
35:04and a big fan of her philosophy lean in
35:08but the facts are and kind of
35:10unfortunately so that inequality is
35:12still exists you're one of six
35:14African-American CEOs there're only 20
35:17female Fortune 500 CEOs um why is the
35:21past so difficult for African-Americans
35:23females and other minorities at very
35:26senior levels within Corporate America
35:28yeah I I think there's several reasons I
35:33clearly uh what you can't deny is that
35:37bias and Prejudice still exists and the
35:40legacy of bias and Prejudice has a Major
35:44Impact uh that just doesn't go away uh
35:48and uh you know I always go back if I
35:52history uh and say in just pick a an era
35:591920s there was full equal opportunity
36:02despite all that happened
36:05historically I think we would be so far
36:07ahead but that didn't
36:09happen uh and um so I think you've got
36:14to deal with that issue I think second
36:17is and this is part of what Cheryl is
36:21talking about we can all analyze um the
36:26reasons why we can't get ahead and we
36:29should be very focused on that and we
36:31should all feel a collective
36:34responsibility to change that but one of
36:38the points when I was growing up uh that
36:40my father emphasized with me was focus
36:43on what you can what you can control and
36:47the only thing you can control is your
36:49performance there's several ways you can
36:51look at that he was not saying that to
36:54limit me what he was saying was that
36:57opens up a range of opportunities and
37:00from a accountability
37:02standpoint don't in fact um run away
37:07from that problem or challenge or
37:09barrier figure out a way to jump over it
37:13and so what uh Cheryl is certainly not
37:18saying is um that there are not a set of
37:23major issues and big issues and
37:25institutional issues
37:27that women have to deal with but that
37:30women clearly can take increasing
37:34ownership for what they need to do that
37:38a support structure is very helpful
37:40because we all need a support structure
37:43and that's important and uh that we got
37:50personally I think at the end of the day
37:55important uh is there's a surprising
37:59phenomenon that happens and it's not
38:03surprising when you get people in
38:05positions who look different and are
38:09different all of a sudden several years
38:12later you get more people who look like
38:16them and so the representation issue is
38:21a big issue is an important
38:27it is at some point uh this is where I
38:30go to just business metrics if someone
38:33is simply saying each year Ken I'm going
38:37to grow uh this business is really going
38:39to do well here are my strategies and
38:48problem so if there is a real commitment
38:51and a real Focus then there need to be
38:53measures and there needs to be
38:55accountability so that those things
38:58happen uh and uh I think that a business
39:03mentality around that can bring about
39:06some very important social
39:09change um I'd love to open it up to
39:12questions from the audience and right
39:14before I do I just want to say one quote
39:16that I found particularly inspiring from
39:18you in the 2008 um commencement address
39:21at Howard University you said it's your
39:23responsibility to the larger
39:25African-American community to face
39:27Prejudice and to make progress to face
39:29history and to make history and um that
39:32was something that I really enjoyed and
39:34reading and was inspired by so um I just
39:37want to share that feedback in a public
39:39setting but um thank you love to open up
39:42uh the audience to Q&A and uh let the
39:46tough questions roll
39:55good someone in the front
40:03here hi uh my name is Nikki Jordan and
40:06I'm a second year MBA student here
40:08really glad that you're able to join us
40:09today so I have a two-part question
40:11related to sort of those very tough
40:13decisions that you were talking about
40:14you know going into the deposits
40:15business Etc um one when you make those
40:18tough decisions would you say it's more
40:19of a intuition gut feeling that you have
40:23or more consensus driven uh from the
40:25people in your you're really senior
40:27advisers and the second part of that if
40:29it is more gut in what you think is the
40:31right decision then what is your process
40:33for bringing people on board and really
40:35rallying people behind really tough
40:37decisions yeah it's a good question I I
40:39think um one what I'm a firm believer in
40:44is that you have to apply what I call
40:49leadership that uh you can't just follow
40:54style um uh sometimes you have to have a
40:58directive style sometimes you have to
41:00have a consensus building
41:02style uh there have to be some
41:05attributes from a leadership standpoint
41:07one of those that I talk a lot about is
41:09integrity because that's the only way
41:11you're going to build trust and that's
41:13for me the consistency of words and
41:15actions but um in some
41:20cases uh I have relied on my gut but
41:28analysis uh I think it's very very rare
41:31sometimes uh on Creative
41:34issues uh I'll look at a piece of uh
41:40advertising and you sort of know this is
41:43it uh and you can't totally explain why
41:47but in a lot of situations I think you
41:51should uh but then judgment is really
41:55important but judgment should be based
41:58on what's the criteria that you're using
42:02to make that judgment what are the
42:04values that you're applying to make that
42:07judgment so what I don't believe in is
42:10making blind judgments I think you
42:12always need to have some criteria and
42:15you always need to have that balanced by
42:20important from a consensus standpoint
42:23there are some issues that I know where
42:27go uh but I know that I've got to get
42:32everyone involved and I'll give you one
42:33example when I took over as
42:35CEO I said I want to change actually
42:39some of the core attributes of our
42:43culture uh I didn't think we were
42:45focused explicitly enough on winning in
42:49marketplace I didn't think we engaged
42:52enough in constructive confrontation so
42:54I literally put here are the values I'd
42:57like for the company on a piece of paper
43:01myself and then I said in fact what
43:03we're going to do is we're going to do
43:05um sessions all around the world and I
43:08want teams sort to come up with the
43:10values and I'd say very
43:12honestly um I don't know what I would
43:14have done if the values hadn't pretty
43:17much matched what I had on the sheet of
43:19paper uh but fortunately they did the
43:23benefit of that was the buyin
43:26was almost instant because people knew
43:30it was a consensus driven process it
43:33wasn't me mandating that so I think
43:35there's certain issues where you mandate
43:37I'll give you an example where from a um
43:42uh the standpoint of having to
43:44decide was um and this goes back to 911
43:49I decided that we were going to return
43:53headquarters uh the majority of the
43:55organization would have voted against it
43:58for very understandable reasons uh I
44:01thought it was important for us to go
44:04back um explain the reasons why and it
44:09accepted um so there's some things that
44:13you can't do by consensus and that was
44:15more of a gut belief feeling but it was
44:18based on a set of values beliefs of why
44:21we should go back um so I think you want
44:26uh that you adapt your leadership style
44:30to the situation which means you've got
44:31to assess in the lingo that we use at
44:35our company you've got to assess the
44:39Readiness of your group to accept
44:42certain leadership so there's some
44:44situations where you know you've got to
44:45be very directive there are other
44:47situations where you're going to be more
44:54driven hi my name is Chandra Chava and
44:58I'm a happy MX customer good thanks for
45:02sharing your thoughts my question is
45:05regarding the new markets that are
45:06coming up now or emerging so for example
45:10there are 2.5 billion people who don't
45:12have access to banking is MX planning to
45:15do something in that area and if you are
45:18what challenges do you see given the uh
45:22you know lack of brand in those
45:23countries and the US relations with
45:26those countries so here's here's what I
45:28think is interesting one is I think um a
45:32number of the emerging developing
45:36markets obviously represent tremendous
45:38growth opportunities what we've seen
45:41from a brand standpoint whether it's
45:43China India a range of markets that our
45:47brand doesn't limit us uh and people
45:51find that strange but I think one of the
45:53reasons why our brand is viewed as a
45:56more open brand is because of the
45:59heritage of the travel business that we
46:01really cut across borders and so people
46:04don't look at us as a uson company alone
46:08uh really has not hurt us so even in a
46:11place like Russia uh the brand uh is
46:15really powerful but I think the key part
46:18of your question is um how do we open
46:21the brand so back to the importance of
46:24this convergence of online offline the
46:27implication of that of what I've said to
46:30our people is scale has been
46:33redefined so it's not enough to say well
46:35we got 100 million cards when Facebook
46:37has a billion customers Google has 1.7
46:41customers uh and the fact that to your
46:44point there are many people that don't
46:47have access to credit and debit products
46:52so we're very focused on it so I'll talk
46:54to you about two things we're doing
46:56one is we've come out with what's called
46:59a reloadable prepaid card which a
47:02reloadable prepaid card is you deposit
47:06card the reality is that this was first
47:10launched in the us but we also are going
47:13to be launching in a number of markets
47:15around the world and in the us alone
47:20304 billion households that are unbanked
47:26so that means if you don't have a
47:27checking account you pay $800 to
47:32,000 to in fact have access to your own
47:35money all right so if you want to cash
47:39your paycheck you pay to cash your
47:42paycheck you want to send money to
47:44someone someone in LA from here it could
47:49cost you 10 or1 to send 80
47:53bucks so the reality is is that there is
47:58need so we came out with a product that
48:01is in fact on a digital
48:04platform uh and it is uh you can operate
48:09it totally on mobile and as you know the
48:11penetration of smartphones is as high or
48:15higher in non-affluent sectors than it
48:18is affluent sectors because they can't
48:21afford a laptop they can't afford
48:23Broadband services so this is a product
48:26that people initially said to me well
48:29AMX you know you've got these high-end
48:31cards how can you offer this product and
48:33I said Back to the Future the reality is
48:37the travels check business Freight
48:39forwarding business was that a
48:40prestigious business that in fact
48:42enhanced the brand because we were
48:44focused on service the question is
48:47creating the right value proposition
48:49with the right economics to that segment
48:52we think this is going to be a very
48:54exciting product since we launched it in
48:57October 85% of the customers coming in
49:02franchise uh almost 50% are under
49:0635 um so we have a lot of Hope there
49:09another thing we're doing in
49:11China is we have done a joint venture
49:14with a company called lean lean you've
49:16heard of mobile top up so you go and you
49:19want to top up your minutes on your
49:20phone in China you go to a
49:23kiosk what we're doing is off of of a
49:26mobile phone uh you'll have the access
49:28to do P2P we're in Three provinces now
49:31we're expanding this company has 300
49:35million customers so I wouldn't mind
49:38getting a nice percentage and
49:40penetration of that customer base so
49:43what's important is that we have
49:47scale and then we've said there also
49:50opportunities to bring in to bring
49:52buyers and sellers together around the
49:54world why because we have a global
49:58authorization system where literally we
50:02can basically decide every single
50:05Transaction what that credit limit is
50:09instantaneously well if you think about
50:11a global Marketplace in the ability
50:13cross border for goods and services that
50:16presents a tremendous opportunity so the
50:19traditional card business is changing
50:22dramatically we're not walking away from
50:25that business but we're expanding
50:28dramatically into other areas and if we
50:31don't dramatically grow in those markets
50:35we're not going to be a growth company
50:38so we have a strong Focus there I think
50:40we have time for one more question from
50:45audience or was someone here right in
50:51Andy is it on oh is it on okay um you
50:56can give her one more one of the
50:59benefits of defining yourself in terms
51:00of a higher purpose is that it doesn't
51:03confine you to a particular product or
51:05service or category um how far do you
51:08think you can and how far do you want to
51:10push the MX brand do you think there
51:12will come a time where our relationship
51:15MX occurs in something that's completely
51:18removed from Financial transactions or
51:20financial services yeah you know already
51:23if you think about it um your
51:25relationship with us is
51:29um I think more than just a financial
51:34transaction um we are and always have
51:37been far more involved as a lifestyle
51:39product so when people ask me about
51:43competition I'm competing with almost
51:46every lifestyle provider in the
51:48traditional business because if I'm
51:50reduced to facilitating a
51:53payment that doesn't make me special at
51:57all so I think that where you're going
52:01to see us uh spread out more is in
52:05Commerce uh so the things we've done
52:07with Twitter and Facebook where you can
52:10take what we call our spin graph and
52:14connect it to the interests and
52:17preferences of uh Facebook customer and
52:20connect them is pretty powerful and we
52:23can do that with a closed loop so
52:25uh I think that certainly we're going to
52:29Commerce travel gives us a tremendous
52:33opportunity of what we're doing from a
52:36standpoint uh the last thing I want
52:40right where we will have a problem is if
52:43we're positioned more and more as just a
52:47company what has helped us tremendously
52:49from a brand standpoint is the customer
52:52looks at us more as a service company
52:54than a financial services
52:56company I want to make sure I keep that
53:01demarcation so so we'll do one last
53:03question because we skipped you we'll
53:05repeat it if you just say yeah sure so
53:07first of all my name is I'm actually
53:112010 uh R was one of my first uh the
53:14first classmates I got to know and was
53:17at the last session so I really
53:18appreciate I also want to say after
53:21graduating I learned a great deal by
53:23practicing so is particularly helpful
53:26even more than two years ago um but my
53:29question is now you the CEO and
53:32president how do you make sure you don't
53:35get flying spots people are not afraid
53:37to give your friend feedback to make
53:39sure you continually are at your
53:43best yeah I I think what's very very
53:45important is one uh which I feel
53:50um I think it's a mistake and a number
53:53of people do it is they get their person
53:56confused with the job they
53:59hold uh I don't get I try not to get
54:02that confused I like being CEO uh but
54:07that's not where I take myself worth
54:09from the fact that I'm CEO one of the
54:12things that I do in a very very
54:14aggressive way is I seek out feedback
54:18and input both inside and outside the
54:21company uh is really to talk to people
54:24who have have very different
54:27perspectives from mine to try to find
54:32network uh both inside and outside the
54:35company that will talk to me because the
54:39reality is doesn't matter who you are
54:43people will be well-meaning and they'll
54:46say I don't really want to talk to Ken
54:49about this I just don't want to worry
54:50him well the reality is sometimes when
54:53that's done uh I'm missing a big issue
54:57that can impact the company and that's
55:00helpful it's my job then to make sure
55:03that I'm very aggressive from an
55:05Outreach uh standpoint and so I really
55:08am throughout the company through
55:10hierarchy people who know know me know
55:13that if you report directly into me it's
55:15not that I'm going to be checking on you
55:16with other people but I'm going to call
55:18people five or 10 levels down in the
55:21company uh I'm going to have meetings
55:23with people uh it's not going to be
55:25based on title it's based on learning
55:28about what the issues are what the
55:31problems are and then outside what I
55:35want to ask people is what do you think
55:37we're doing wrong what do you think we
55:39need to do better what are the issues
55:41and that goes back to the constructive
55:43confrontation so you really want to
55:45create a climate where you're being
55:50fact I don't think I'm really getting
55:54the true word unless I go through
55:57periods where I'm feeling
56:00uncomfortable uh and I think that's a
56:02good state for people to be in
56:04periodically not permanently but
56:09uncomfortable uh because that is a
56:12leveler and that's important
56:14particularly when you're a CEO to be in
56:16situations uh where you can be in a more
56:21place in closing we always ask our view
56:24from the top speaker is the same
56:25question that we all have to answer on
56:28the GSP application what matters to you
56:30most and why well things change over
56:33time uh what I would say is what matters
56:36to me most uh is really my wife and my
56:40sons uh from a public policy standpoint
56:44what matters to me most is income
56:47inequality uh and third for me
56:50personally what matters to me most is
56:53maintaining my integrity and authen
56:55authenticity thank you very much thank
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