[{"_1":2,"_3":-5,"_4":-5},"loaderData",{"_5":6,"_7":8},"actionData","errors","root",{"_138":-5,"_139":-5,"_140":141,"_142":143,"_144":145},"routes/clips.$id.$slug",{"_9":10,"_11":12},"clip",{"_13":14,"_15":16,"_17":-5,"_18":19,"_20":-5,"_21":22,"_23":24,"_25":26,"_27":28,"_29":30,"_31":32,"_33":34,"_35":36,"_37":38,"_39":40,"_41":-5,"_42":-5,"_43":-5,"_44":45,"_46":-5,"_47":48,"_49":50,"_51":-5},"canonicalUrl","https://howleaderslead.com/clips/1088/what-investors-look-for-in-founders","id",1088,"title","What investors look for in founders","subtitle","transcript","WEBVTT\n\n1\n00:00:00.000 --> 00:00:04.280\nThey've one of the things that is really important and actually I've followed\n\n2\n00:00:04.280 --> 00:00:09.260\nsome advice that Warren Buffett gave me and he's also been very public in\n\n3\n00:00:09.260 --> 00:00:11.160\ngeneral and giving this advice.\n\n4\n00:00:11.160 --> 00:00:17.600\nIs two of the most important things you can do is one judge the character of\n\n5\n00:00:17.600 --> 00:00:20.400\nthe leader or the CEO or the founder.\n\n6\n00:00:20.880 --> 00:00:27.200\nWhat are their values what do they stand for because particularly in early\n\n7\n00:00:27.200 --> 00:00:33.790\nstage you're making a bet on the person the second thing that's very important\n\n8\n00:00:33.790 --> 00:00:34.800\nfor me.\n\n9\n00:00:34.800 --> 00:00:39.400\nIs do they really want to build a company that will endure.\n\n10\n00:00:39.400 --> 00:00:46.470\nAnd how do they think about the marketplace because part of what you're looking\n\n11\n00:00:46.470 --> 00:00:48.920\nat is does this founder.\n\n12\n00:00:49.120 --> 00:00:55.000\nHave a real concept of what they want to achieve.\n\n13\n00:00:55.000 --> 00:01:00.580\nWhy are they introducing these products or services do they want to build a\n\n14\n00:01:00.580 --> 00:01:05.760\ncompany that's really going to endure or is it just to make a quick buck.\n\n15\n00:01:05.760 --> 00:01:10.440\nAnd do something for three or four years and then sell it we're not interested\n\n16\n00:01:10.440 --> 00:01:15.100\nin that type of company or person not going to make a value judgment but that's\n\n17\n00:01:15.100 --> 00:01:16.800\nnot the type of business.\n\n18\n00:01:16.880 --> 00:01:21.350\nAnd person that I want to be involved with so I think what's absolutely\n\n19\n00:01:21.350 --> 00:01:23.480\nimportant is an assessment.\n\n20\n00:01:23.480 --> 00:01:30.190\nOf the character of the founder and then do they have the grit do they have the\n\n21\n00:01:30.190 --> 00:01:33.000\nresilience do they have a vision.\n\n22\n00:01:33.000 --> 00:01:37.750\nFor what they want to accomplish and then very importantly for example do they\n\n23\n00:01:37.750 --> 00:01:40.680\nunderstand the details of their business.\n\n24\n00:01:41.000 --> 00:01:46.160\nBecause in the beginning throughout I really believe you've got to understand\n\n25\n00:01:46.160 --> 00:01:51.320\nthe high level strategy but you have to in fact understand the key details.\n","pretty_transcript","start_time",270222,"end_time",381411,"keywords","startup, investor, founder, leader","slug","what-investors-look-for-in-founders","origin","cms","mux_playback_id","CUA4alQSVYEbalu101AJLr025w36omp5wLv9yZ7Rmdtnc","mux_asset_id","7fD8Ay5SjOViY3diqk8JRkRVp8GUNa34p0100iIkmrVXo","leader_id",73,"episode_id",222,"updated_at","2025-03-07T15:20:16.000000Z","meta_title","meta_description","og_image_media_id","web_url","https://www.howleaderslead.com/clips/1088/what-investors-look-for-in-founders","og_image_url","leader",{"_13":36,"_101":102,"_103":104,"_105":106,"_25":107,"_108":109,"_62":110,"_59":111,"_112":113,"_69":114,"_39":115,"_116":-5,"_41":-5,"_42":-5,"_43":-5,"_117":118,"_89":119,"_44":120,"_121":122,"_123":124,"_46":-5,"_125":126,"_127":128,"_93":129,"_51":-5},"episode",{"_13":38,"_15":52,"_27":53,"_17":54,"_55":56,"_18":57,"_20":58,"_59":60,"_61":-5,"_62":60,"_63":-5,"_64":65,"_66":67,"_68":-5,"_69":-5,"_70":71,"_72":73,"_74":-5,"_35":36,"_39":75,"_41":-5,"_42":-5,"_43":-5,"_76":77,"_78":79,"_80":81,"_82":83,"_84":-5,"_85":-5,"_86":87,"_88":-5,"_89":-5,"_46":-5,"_90":91,"_92":-5,"_93":-5,"_51":-5},"og_image_media","Embrace Constructive Confrontation","embrace-constructive-confrontation","Listen as Ken and David discuss defining reality, growing up in the midst of the Civil Rights movement, and getting out of the “Ken-zone.”","summary","

Today's guest is Ken Chenault, the Former Chairman and CEO of American Express, and the current Chairman and Managing Partner of General Catalyst, a dynamic private equity firm. Now, if you run a business or lead a team, there are moments when you need to lean into confrontation. And I don't mean dance around the confrontation, I'm talking about facing it head on. For a lot of people, this can be really hard to do, really intimidating. But the great leaders I know, like Ken, have learned how to engage in constructive confrontation.

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","WEBVTT\n\n1\n00:00:00.000 --> 00:00:07.020\nWelcome to How Leaders Lead, where every week you get to listen in while I\n\n2\n00:00:07.020 --> 00:00:07.680\ninterview some\n\n3\n00:00:07.680 --> 00:00:09.520\nof the best leaders in the world.\n\n4\n00:00:09.520 --> 00:00:12.980\nI break down the key learning so that by the end of the episode, you'll have\n\n5\n00:00:12.980 --> 00:00:13.560\nsomething\n\n6\n00:00:13.560 --> 00:00:17.440\nsimple that you can apply as you develop into a better leader.\n\n7\n00:00:17.440 --> 00:00:19.840\nThat's what this podcast is all about.\n\n8\n00:00:19.840 --> 00:00:24.180\nToday's guest is Ken Shinol, the former chairman and CEO of American Express\n\n9\n00:00:24.180 --> 00:00:25.040\nand the current\n\n10\n00:00:25.040 --> 00:00:31.040\nchairman and a managing director at General Catalyst, a dynamic private equity\n\n11\n00:00:31.040 --> 00:00:31.760\nfirm.\n\n12\n00:00:31.760 --> 00:00:35.960\nIf you run a business or lead a team, you know there are moments when you need\n\n13\n00:00:35.960 --> 00:00:36.440\nto lean\n\n14\n00:00:36.440 --> 00:00:38.400\nin to confrontation.\n\n15\n00:00:38.400 --> 00:00:40.840\nI don't mean dance around the confrontation.\n\n16\n00:00:40.840 --> 00:00:43.760\nI'm talking about facing that head-on.\n\n17\n00:00:43.760 --> 00:00:48.460\nFor a lot of people, this can be really hard to do, really intimidating, but\n\n18\n00:00:48.460 --> 00:00:49.360\nthe great leaders\n\n19\n00:00:49.360 --> 00:00:53.480\nI know have learned to engage in constructive confrontation.\n\n20\n00:00:53.480 --> 00:00:54.720\nLet me tell you something.\n\n21\n00:00:54.720 --> 00:01:00.770\nIf I was working for Ken and I was going to have a one-on-one conversation with\n\n22\n00:01:00.770 --> 00:01:01.160\nhim,\n\n23\n00:01:01.160 --> 00:01:05.640\nI know that I would know exactly where he's coming from.\n\n24\n00:01:05.640 --> 00:01:10.100\nHe's going to listen to me and he'd know what I was thinking, but make no\n\n25\n00:01:10.100 --> 00:01:11.120\nmistake, I'm going\n\n26\n00:01:11.120 --> 00:01:15.340\nto know how he feels, what his concerns are, and what areas me and my team need\n\n27\n00:01:15.340 --> 00:01:15.840\nto work\n\n28\n00:01:15.840 --> 00:01:16.840\non.\n\n29\n00:01:16.840 --> 00:01:20.360\nAnd here's what I think makes Ken's approach so effective.\n\n30\n00:01:20.360 --> 00:01:24.630\nFor giving you specific feedback, he'll give you input to help you put a game\n\n31\n00:01:24.630 --> 00:01:25.520\nplan together\n\n32\n00:01:25.520 --> 00:01:29.920\nso that you and your team can move forward and take the appropriate action.\n\n33\n00:01:29.920 --> 00:01:33.780\nHe just doesn't walk in your office and then leave the problem with you.\n\n34\n00:01:33.780 --> 00:01:35.880\nHe helps you work through the problem.\n\n35\n00:01:35.880 --> 00:01:40.920\nHe wants you to be successful and he knows that his job is to add value through\n\n36\n00:01:40.920 --> 00:01:42.160\nhis experience\n\n37\n00:01:42.160 --> 00:01:44.360\nand his expertise.\n\n38\n00:01:44.360 --> 00:01:49.040\nThat ability to not only engage in confrontation head-on, address the issues\n\n39\n00:01:49.040 --> 00:01:49.960\nthat you need to\n\n40\n00:01:49.960 --> 00:01:54.910\ndevelop, either personally or on your team, well, he does that in a positive\n\n41\n00:01:54.910 --> 00:01:55.960\nand respectful\n\n42\n00:01:55.960 --> 00:01:59.000\nway that sets others up for success.\n\n43\n00:01:59.000 --> 00:02:03.070\nThat is a unique skill set and it's one of the many things we can learn from\n\n44\n00:02:03.070 --> 00:02:03.600\nKen in this\n\n45\n00:02:03.600 --> 00:02:05.200\nconversation.\n\n46\n00:02:05.200 --> 00:02:09.480\nBy the end of this week's episode, I know that you will be more prepared to\n\n47\n00:02:09.480 --> 00:02:10.080\nengage in\n\n48\n00:02:10.080 --> 00:02:12.120\nconstructive confrontation.\n\n49\n00:02:12.120 --> 00:02:15.840\nI'm excited for you to listen in and learn along with me.\n\n50\n00:02:15.840 --> 00:02:28.360\nHere's my conversation with my good friend and soon to be yours, Ken Shinault.\n\n51\n00:02:28.360 --> 00:02:31.280\nThanks so much for taking the time to have this conversation.\n\n52\n00:02:31.280 --> 00:02:32.960\nGreat to be here, David.\n\n53\n00:02:32.960 --> 00:02:36.740\nKen, I had a blast having dinner with you at Jim Robinson, another former\n\n54\n00:02:36.740 --> 00:02:37.560\nchairman of\n\n55\n00:02:37.560 --> 00:02:39.000\nAmerica's Press.\n\n56\n00:02:39.000 --> 00:02:43.550\nI learned that even though you retired from American Express, you have clearly\n\n57\n00:02:43.550 --> 00:02:44.200\nre-fired\n\n58\n00:02:44.200 --> 00:02:46.300\nyour career at General Catalyst.\n\n59\n00:02:46.300 --> 00:02:48.040\nWhat led you to go down this path?\n\n60\n00:02:48.040 --> 00:02:53.700\nFor me, David, I've always tried to be involved in things that I think are\n\n61\n00:02:53.700 --> 00:02:55.440\ngoing to be transforming\n\n62\n00:02:55.440 --> 00:03:00.560\nfor me and to put me in areas where I really have to learn.\n\n63\n00:03:00.560 --> 00:03:05.310\nI would not have planned out five years before I stepped down that I was going\n\n64\n00:03:05.310 --> 00:03:05.800\nto go into\n\n65\n00:03:05.800 --> 00:03:07.600\nventure capital.\n\n66\n00:03:07.600 --> 00:03:13.710\nAt two of the founders of General Catalyst, David Fialko and Joel Cutler, and a\n\n67\n00:03:13.710 --> 00:03:14.280\nthird\n\n68\n00:03:14.280 --> 00:03:19.380\npartner, Hamant, Tunisia, five years before I stepped down, said, \"You're\n\n69\n00:03:19.380 --> 00:03:20.240\nsomeone that\n\n70\n00:03:20.240 --> 00:03:23.640\nwe think really could work well with founders.\n\n71\n00:03:23.640 --> 00:03:25.560\nYou clearly love technology.\n\n72\n00:03:25.560 --> 00:03:26.560\nI've gotten to know them.\n\n73\n00:03:26.560 --> 00:03:30.960\nI knew them for close to 20 years now.\"\n\n74\n00:03:30.960 --> 00:03:36.640\nWhat was exciting to me is I think technology is at the forefront.\n\n75\n00:03:36.640 --> 00:03:44.140\nI really liked the idea of being involved with companies right at the start\n\n76\n00:03:44.140 --> 00:03:45.520\nthrough different\n\n77\n00:03:45.520 --> 00:03:48.120\ncycles.\n\n78\n00:03:48.120 --> 00:03:54.360\nWhat I always felt at American Express, I really focused on this notion that\n\n79\n00:03:54.360 --> 00:03:55.320\nyou've got to\n\n80\n00:03:55.320 --> 00:03:58.280\nbecome the company that will put you out of business.\n\n81\n00:03:58.280 --> 00:04:02.000\nRe-invention is important to me for a company.\n\n82\n00:04:02.000 --> 00:04:08.030\nRe-invention is important for a leader as long as you have some real core\n\n83\n00:04:08.030 --> 00:04:09.040\nvalues.\n\n84\n00:04:09.040 --> 00:04:10.040\nI always love that.\n\n85\n00:04:10.040 --> 00:04:13.820\nI remember you talking at the ACSC, which was a CEO for him that we were at,\n\n86\n00:04:13.820 --> 00:04:14.520\nwhere you did\n\n87\n00:04:14.520 --> 00:04:17.330\ntalk about you have to be the company that puts yourself out of business\n\n88\n00:04:17.330 --> 00:04:18.080\nbecause there's\n\n89\n00:04:18.080 --> 00:04:20.480\na lot of people out there attacking you.\n\n90\n00:04:20.480 --> 00:04:24.400\nI'd like to ask you, I like to really get inside of the heads of how leaders\n\n91\n00:04:24.400 --> 00:04:25.000\nthink.\n\n92\n00:04:25.000 --> 00:04:30.030\nWhat insights have you gleaned on how to evaluate the startups that you invest\n\n93\n00:04:30.030 --> 00:04:30.360\nin?\n\n94\n00:04:30.360 --> 00:04:34.970\nOne of the things that is really important, and actually I've followed some\n\n95\n00:04:34.970 --> 00:04:35.760\nadvice that\n\n96\n00:04:35.760 --> 00:04:40.820\nWarren Buffett gave me, and he's also been very public in general in giving\n\n97\n00:04:40.820 --> 00:04:41.840\nthis advice,\n\n98\n00:04:41.840 --> 00:04:47.510\nis two of the most important things you can do is one, judge the character of\n\n99\n00:04:47.510 --> 00:04:48.240\nthe leader\n\n100\n00:04:48.240 --> 00:04:51.520\nor the CEO or the founder.\n\n101\n00:04:51.520 --> 00:04:53.200\nWhat are their values?\n\n102\n00:04:53.200 --> 00:04:55.680\nWhat do they stand for?\n\n103\n00:04:55.680 --> 00:05:01.130\nThese are the values, particularly in early stage, you're making a bet on the\n\n104\n00:05:01.130 --> 00:05:01.960\nperson.\n\n105\n00:05:01.960 --> 00:05:07.570\nThe second thing that's very important for me is do they really want to build a\n\n106\n00:05:07.570 --> 00:05:08.280\ncompany\n\n107\n00:05:08.280 --> 00:05:11.240\nthat will endure?\n\n108\n00:05:11.240 --> 00:05:14.680\nHow do they think about the marketplace?\n\n109\n00:05:14.680 --> 00:05:23.600\nBecause part of what you're looking at is does this founder have a real concept\n\n110\n00:05:23.600 --> 00:05:23.920\nof what\n\n111\n00:05:23.920 --> 00:05:26.480\nthey want to achieve?\n\n112\n00:05:26.480 --> 00:05:30.520\nWhy are they introducing these products or services?\n\n113\n00:05:30.520 --> 00:05:33.920\nDo they want to build a company that's really going to endure?\n\n114\n00:05:33.920 --> 00:05:37.640\nOr is it just to make a quick buck and do something for three or four years and\n\n115\n00:05:37.640 --> 00:05:38.320\nthen sell\n\n116\n00:05:38.320 --> 00:05:39.320\nit?\n\n117\n00:05:39.320 --> 00:05:43.120\nWe're not interested in that type of company or person.\n\n118\n00:05:43.120 --> 00:05:47.110\nNot going to make a value judgment, but that's not the type of business and\n\n119\n00:05:47.110 --> 00:05:47.760\nperson that I\n\n120\n00:05:47.760 --> 00:05:50.000\nwant to be involved with.\n\n121\n00:05:50.000 --> 00:05:56.440\nI think what's absolutely important is an assessment of the character of the\n\n122\n00:05:56.440 --> 00:05:57.360\nfounder.\n\n123\n00:05:57.360 --> 00:05:59.800\nThen do they have the grit?\n\n124\n00:05:59.800 --> 00:06:01.560\nDo they have the resilience?\n\n125\n00:06:01.560 --> 00:06:05.560\nDo they have a vision for what they want to accomplish?\n\n126\n00:06:05.560 --> 00:06:10.340\nThen very importantly, for example, do they understand the details of their\n\n127\n00:06:10.340 --> 00:06:11.280\nbusiness?\n\n128\n00:06:11.280 --> 00:06:16.210\nBecause in the beginning, throughout, I really believe you've got to understand\n\n129\n00:06:16.210 --> 00:06:17.040\nthe high-level\n\n130\n00:06:17.040 --> 00:06:21.360\nstrategy, but you have to, in fact, understand the key details.\n\n131\n00:06:21.360 --> 00:06:25.560\nKen, I know you're very focused on making a difference in the world.\n\n132\n00:06:25.560 --> 00:06:29.910\nI read your article in Barron's recently where you talked about responsible\n\n133\n00:06:29.910 --> 00:06:30.880\ninnovation for\n\n134\n00:06:30.880 --> 00:06:32.680\ntech companies.\n\n135\n00:06:32.680 --> 00:06:36.440\nWhat does that mean to you, responsible innovation?\n\n136\n00:06:36.440 --> 00:06:38.080\nWhy did you write the article?\n\n137\n00:06:38.080 --> 00:06:45.570\nI fundamentally believed that you want to build companies that will endure and\n\n138\n00:06:45.570 --> 00:06:46.120\nyou want\n\n139\n00:06:46.120 --> 00:06:50.610\nto build companies that, in fact, are going to make the world better, both for\n\n140\n00:06:50.610 --> 00:06:51.840\ntheir people\n\n141\n00:06:51.840 --> 00:06:54.640\nand the world at large.\n\n142\n00:06:54.640 --> 00:06:58.640\nOne of the things that I felt very strongly about and my partner, Hey, Montan\n\n143\n00:06:58.640 --> 00:06:59.240\nese, who\n\n144\n00:06:59.240 --> 00:07:08.030\nwas the co-author with me is that the era of move fast and break things is over\n\n145\n00:07:08.030 --> 00:07:08.080\n.\n\n146\n00:07:08.080 --> 00:07:12.060\nYou can't have a situation where someone says, \"I'm going to come out with a\n\n147\n00:07:12.060 --> 00:07:12.600\nproduct\n\n148\n00:07:12.600 --> 00:07:19.010\nor service with no idea or, in fact, regard for the consequences of that\n\n149\n00:07:19.010 --> 00:07:21.520\nproduct or service.\"\n\n150\n00:07:21.520 --> 00:07:27.530\nWhat we're also saying is, with the advancements in AI machine learning, you\n\n151\n00:07:27.530 --> 00:07:28.480\nactually should\n\n152\n00:07:28.480 --> 00:07:36.590\nbe able to better determine and at least hypothesize what will be the impacts\n\n153\n00:07:36.590 --> 00:07:38.680\nof what I'm doing.\n\n154\n00:07:38.680 --> 00:07:43.580\nIf in fact you're a manufacturing company, in the beginning, understand what\n\n155\n00:07:43.580 --> 00:07:44.120\nsome of\n\n156\n00:07:44.120 --> 00:07:46.560\nthe environmental impacts are going to be.\n\n157\n00:07:46.560 --> 00:07:52.330\nIf in fact you're offering products or services, understand what the impacts of\n\n158\n00:07:52.330 --> 00:07:53.240\nthose products\n\n159\n00:07:53.240 --> 00:07:56.080\nand services will be on different groups.\n\n160\n00:07:56.080 --> 00:08:01.700\nIf in fact you want to have a company that embraces diversity and inclusion,\n\n161\n00:08:01.700 --> 00:08:02.520\nhow are you\n\n162\n00:08:02.520 --> 00:08:06.400\ndoing that right from the beginning?\n\n163\n00:08:06.400 --> 00:08:12.600\nThe key thing for me, David, is we live in a world today where you've got to\n\n164\n00:08:12.600 --> 00:08:13.600\nhave a better\n\n165\n00:08:13.600 --> 00:08:20.170\nunderstanding of the impacts of your products and services on the world at\n\n166\n00:08:20.170 --> 00:08:21.440\nlarge and very\n\n167\n00:08:21.440 --> 00:08:27.540\nimportantly, I think it will help you be very commercially successful and also\n\n168\n00:08:27.540 --> 00:08:28.280\nto build\n\n169\n00:08:28.280 --> 00:08:32.970\na company that will endure because we all need a well functioning society to\n\n170\n00:08:32.970 --> 00:08:33.160\nhave a\n\n171\n00:08:33.160 --> 00:08:35.360\nwell functioning economy.\n\n172\n00:08:35.360 --> 00:08:36.960\nWhere do you think tech has gone wrong?\n\n173\n00:08:36.960 --> 00:08:42.080\nIf we look at the whole issue of information, technology, and privacy, we look\n\n174\n00:08:42.080 --> 00:08:42.920\nat some of\n\n175\n00:08:42.920 --> 00:08:46.600\nthe biases in artificial intelligence.\n\n176\n00:08:46.600 --> 00:08:51.120\nI don't think anyone comes out with a company or a business and say, \"I want to\n\n177\n00:08:51.120 --> 00:08:52.000\nhurt people,\"\n\n178\n00:08:52.000 --> 00:08:56.620\nbut what I think technology has done to an extent and we've seen this in the\n\n179\n00:08:56.620 --> 00:08:57.480\nwhole area\n\n180\n00:08:57.480 --> 00:09:02.980\nof information management is they're saying, \"Let the government deal with that\n\n181\n00:09:02.980 --> 00:09:03.080\n.\"\n\n182\n00:09:03.080 --> 00:09:06.440\nOur job is just to come out with products and services.\n\n183\n00:09:06.440 --> 00:09:10.620\nOne of the things that I've done actually with a mutual friend of ours, Sam Pal\n\n184\n00:09:10.620 --> 00:09:11.240\nmasano,\n\n185\n00:09:11.240 --> 00:09:16.030\nis we formed a group called the Data Consortium to create a set of standards\n\n186\n00:09:16.030 --> 00:09:17.000\nfor how we use\n\n187\n00:09:17.000 --> 00:09:20.760\ndata, how we use information.\n\n188\n00:09:20.760 --> 00:09:25.640\nThere is now a responsibility that has to be at the forefront.\n\n189\n00:09:25.640 --> 00:09:29.720\nWhen we're talking about you working with the founders of these startups, you\n\n190\n00:09:29.720 --> 00:09:30.440\nabsolutely\n\n191\n00:09:30.440 --> 00:09:31.800\nlit up, Ken.\n\n192\n00:09:31.800 --> 00:09:33.120\nIt was fun to see.\n\n193\n00:09:33.120 --> 00:09:34.880\nYou were really excited about it.\n\n194\n00:09:34.880 --> 00:09:36.720\nI know you do a lot of coaching.\n\n195\n00:09:36.720 --> 00:09:40.960\nWhat's a one-on-one coaching session like with Ken Chanel?\n\n196\n00:09:40.960 --> 00:09:45.360\nIt really varies, obviously, based on the individual.\n\n197\n00:09:45.360 --> 00:09:53.330\nOne of the things that I talk to founders about very directly is eliciting and\n\n198\n00:09:53.330 --> 00:09:54.520\nreceiving\n\n199\n00:09:54.520 --> 00:09:57.200\ndirect feedback.\n\n200\n00:09:57.200 --> 00:10:02.720\nThis concept that I used in management of constructive confrontation, do it\n\n201\n00:10:02.720 --> 00:10:04.000\nrespectfully, but at\n\n202\n00:10:04.000 --> 00:10:06.740\nthe end of the day, what you want with your people and what you're going to get\n\n203\n00:10:06.740 --> 00:10:07.920\nwith me\n\n204\n00:10:07.920 --> 00:10:13.050\nis I'm going to tell you how I feel, what my concerns are, what areas you need\n\n205\n00:10:13.050 --> 00:10:14.120\nto develop.\n\n206\n00:10:14.120 --> 00:10:15.680\nLet's talk about it.\n\n207\n00:10:15.680 --> 00:10:19.060\nBut then let's put a game plan together because one of the things that's\n\n208\n00:10:19.060 --> 00:10:20.360\nimportant that I\n\n209\n00:10:20.360 --> 00:10:24.840\nreally stress to founders or anyone that I'm mentoring is we're all judged by\n\n210\n00:10:24.840 --> 00:10:26.880\nour actions.\n\n211\n00:10:26.880 --> 00:10:28.800\nMake me through the outcomes.\n\n212\n00:10:28.800 --> 00:10:32.490\nBehaviors that you engage in, let's understand what the impacts are, let's\n\n213\n00:10:32.490 --> 00:10:33.400\nunderstand what\n\n214\n00:10:33.400 --> 00:10:37.680\nthe results are because we all got to be outcome-driven.\n\n215\n00:10:37.680 --> 00:10:41.820\nBut again, if we want to do something that's really lasting and meaningful, it\n\n216\n00:10:41.820 --> 00:10:42.120\n's got to\n\n217\n00:10:42.120 --> 00:10:45.080\nbe motivated by values and principles.\n\n218\n00:10:45.080 --> 00:10:46.080\nAbsolutely.\n\n219\n00:10:46.080 --> 00:10:48.480\nIt is clear you're having a lot of fun doing this.\n\n220\n00:10:48.480 --> 00:10:50.640\nI want to take you back now, Ken.\n\n221\n00:10:50.640 --> 00:10:52.160\nTell us about your upbringing.\n\n222\n00:10:52.160 --> 00:10:58.750\nIt's interesting Dave, growing up really in 50s, 60s, 70s, I grew up very\n\n223\n00:10:58.750 --> 00:10:59.720\nfortunate.\n\n224\n00:10:59.720 --> 00:11:05.460\nI had parents who were really inculcated in us, a work ethic, but a strong\n\n225\n00:11:05.460 --> 00:11:08.400\nsense of values.\n\n226\n00:11:08.400 --> 00:11:13.790\nThe reality is growing up at that time as an African-American in the midst of\n\n227\n00:11:13.790 --> 00:11:14.560\nthe Civil\n\n228\n00:11:14.560 --> 00:11:19.020\nRights Movement, one of the things that I have said to people is I was born\n\n229\n00:11:19.020 --> 00:11:19.800\nliterally\n\n230\n00:11:19.800 --> 00:11:25.260\nthree years before Brown v. Board of Education, which struck down separate but\n\n231\n00:11:25.260 --> 00:11:25.960\nequal.\n\n232\n00:11:25.960 --> 00:11:28.560\nMy life would have been very different.\n\n233\n00:11:28.560 --> 00:11:36.140\nSo I feel I've had an incredible life that I could see change and I could help\n\n234\n00:11:36.140 --> 00:11:37.160\nbring about\n\n235\n00:11:37.160 --> 00:11:38.160\nchange.\n\n236\n00:11:38.160 --> 00:11:40.480\nBut growing up, I love sports.\n\n237\n00:11:40.480 --> 00:11:41.480\nI had a dream.\n\n238\n00:11:41.480 --> 00:11:44.760\nI wanted to be a professional basketball player.\n\n239\n00:11:44.760 --> 00:11:47.840\nI thought I was pretty good in baseball.\n\n240\n00:11:47.840 --> 00:11:52.200\nI was literally almost the same height I am now in eighth grade.\n\n241\n00:11:52.200 --> 00:11:55.940\nAnd one of the people that I played basketball with who still has remained a\n\n242\n00:11:55.940 --> 00:11:56.620\ngood friend\n\n243\n00:11:56.620 --> 00:11:57.620\nwas Dr. J.\n\n244\n00:11:57.620 --> 00:11:58.620\nIs that right?\n\n245\n00:11:58.620 --> 00:11:59.620\nYeah.\n\n246\n00:11:59.620 --> 00:12:03.840\nAnd so what I realized is J grew a lot more than I did.\n\n247\n00:12:03.840 --> 00:12:08.520\nSo I had to reevaluate my circumstances and became a point guard.\n\n248\n00:12:08.520 --> 00:12:13.000\nBut academically, my first eight years, I was an indifferent student.\n\n249\n00:12:13.000 --> 00:12:17.320\nI tested well, but I didn't really apply myself.\n\n250\n00:12:17.320 --> 00:12:19.600\nIt drove my parents crazy.\n\n251\n00:12:19.600 --> 00:12:22.860\nAnd then really over the summer between eighth and ninth grade, I don't know\n\n252\n00:12:22.860 --> 00:12:24.280\nwhat happened.\n\n253\n00:12:24.280 --> 00:12:27.400\nBut just a level of maturity came to me.\n\n254\n00:12:27.400 --> 00:12:32.490\nAnd I also at that time, I didn't really have a concept of what it would be to\n\n255\n00:12:32.490 --> 00:12:33.560\nbe a business\n\n256\n00:12:33.560 --> 00:12:34.560\nleader.\n\n257\n00:12:34.560 --> 00:12:35.560\nI just didn't know a lot about business.\n\n258\n00:12:35.560 --> 00:12:38.240\nI didn't have a lot of interest in business.\n\n259\n00:12:38.240 --> 00:12:40.440\nSo I actually thought I was going to be a civil rights lawyer.\n\n260\n00:12:40.440 --> 00:12:46.930\nMy parents, I think, did a terrific job making me aware of the challenges as a\n\n261\n00:12:46.930 --> 00:12:48.120\nblack person\n\n262\n00:12:48.120 --> 00:12:52.040\nin the United States, but also that I should have high aspirations.\n\n263\n00:12:52.040 --> 00:12:53.840\nI'll just tell you one story.\n\n264\n00:12:53.840 --> 00:12:58.730\nWhen my parents were looking for a school, the public school they found was\n\n265\n00:12:58.730 --> 00:12:59.680\nshifting black\n\n266\n00:12:59.680 --> 00:13:02.280\nkids into only vocational programs.\n\n267\n00:13:02.280 --> 00:13:03.520\nMy father didn't like that.\n\n268\n00:13:03.520 --> 00:13:08.010\nAnd so he found a private school and the headmaster said, well, why do you want\n\n269\n00:13:08.010 --> 00:13:08.720\nyour child to\n\n270\n00:13:08.720 --> 00:13:09.720\ngo here?\n\n271\n00:13:09.720 --> 00:13:10.720\nI went through why.\n\n272\n00:13:10.720 --> 00:13:14.360\nMy mother said, I want my children to feel that if they want to be president of\n\n273\n00:13:14.360 --> 00:13:14.960\nthe United\n\n274\n00:13:14.960 --> 00:13:16.200\nStates, that they could do that.\n\n275\n00:13:16.200 --> 00:13:17.520\nNow, you can imagine this.\n\n276\n00:13:17.520 --> 00:13:21.160\nThis was in 1956.\n\n277\n00:13:21.160 --> 00:13:23.160\nThat was crazy.\n\n278\n00:13:23.160 --> 00:13:26.240\nBut that just gives you a sense of the optimism.\n\n279\n00:13:26.240 --> 00:13:31.080\nAnd I think that really has helped me in life is despite the obstacles, figure\n\n280\n00:13:31.080 --> 00:13:31.520\nout a way\n\n281\n00:13:31.520 --> 00:13:36.880\naround it and be optimistic that you can bring about change.\n\n282\n00:13:36.880 --> 00:13:39.240\nYou know, you did end up at the American Express.\n\n283\n00:13:39.240 --> 00:13:41.880\nYou know, what were the big decisions that took you there?\n\n284\n00:13:41.880 --> 00:13:42.880\nYeah.\n\n285\n00:13:42.880 --> 00:13:47.330\nSo I've not been the person and I respect people who can do it, who write this\n\n286\n00:13:47.330 --> 00:13:47.960\nsort of\n\n287\n00:13:47.960 --> 00:13:49.840\n25 year game plan.\n\n288\n00:13:49.840 --> 00:13:50.840\nHere's where I want to be.\n\n289\n00:13:50.840 --> 00:13:52.400\nHere's what I want to do.\n\n290\n00:13:52.400 --> 00:13:55.560\nMy view is I just fall in love with things.\n\n291\n00:13:55.560 --> 00:13:59.320\nTheir trends, their opportunities that really motivate me.\n\n292\n00:13:59.320 --> 00:14:03.200\nSo I'm less the person who had this 25 year career plan.\n\n293\n00:14:03.200 --> 00:14:04.680\nGod bless people who can do that.\n\n294\n00:14:04.680 --> 00:14:06.280\nI would have been too careful.\n\n295\n00:14:06.280 --> 00:14:08.280\nAnd so I was at Bain and Company.\n\n296\n00:14:08.280 --> 00:14:10.560\nI was actually enjoying myself there.\n\n297\n00:14:10.560 --> 00:14:14.310\nActually, one of the people I worked with a lot was Mitt Romney, which I really\n\n298\n00:14:14.310 --> 00:14:15.360\nenjoyed.\n\n299\n00:14:15.360 --> 00:14:18.960\nAnd a headhunter talked to me about an opportunity at American Express.\n\n300\n00:14:18.960 --> 00:14:23.490\nAnd what was interesting is the opportunity was that American Express had\n\n301\n00:14:23.490 --> 00:14:25.320\ninvested in cable,\n\n302\n00:14:25.320 --> 00:14:26.560\nWarner Cable.\n\n303\n00:14:26.560 --> 00:14:33.600\nAnd so to date me, I saw cable as really an incredible technology with a lot of\n\n304\n00:14:33.600 --> 00:14:35.440\npossibilities.\n\n305\n00:14:35.440 --> 00:14:40.220\nAnd so Lou Gerstner at that time was head of the largest division at American\n\n306\n00:14:40.220 --> 00:14:40.840\nExpress\n\n307\n00:14:40.840 --> 00:14:44.320\nand also head of strategic planning.\n\n308\n00:14:44.320 --> 00:14:47.800\nAnd they were looking for sort of a mid-level person.\n\n309\n00:14:47.800 --> 00:14:53.650\nAnd I came down and talked to a number of people in Lue also and said, let me\n\n310\n00:14:53.650 --> 00:14:54.160\nmake the\n\n311\n00:14:54.160 --> 00:14:55.160\nleap.\n\n312\n00:14:55.160 --> 00:14:59.320\nAnd I remember going home talking to Kathy, who you know, and saying, you know,\n\n313\n00:14:59.320 --> 00:14:59.720\nI think\n\n314\n00:14:59.720 --> 00:15:04.520\nI'm going to go to American Express and Kathy is diligent, she said.\n\n315\n00:15:04.520 --> 00:15:07.800\nBut they're a payments company, they're a travel company.\n\n316\n00:15:07.800 --> 00:15:10.280\nAnd you're going there for cable.\n\n317\n00:15:10.280 --> 00:15:12.880\nAnd I said, well, let me explain what I'm trying to do here.\n\n318\n00:15:12.880 --> 00:15:17.800\nSo she fortunately agreed and she was in her last year law school.\n\n319\n00:15:17.800 --> 00:15:20.560\nAnd it was a terrific experience.\n\n320\n00:15:20.560 --> 00:15:25.510\nAnd then David, what was critical to my career, and I would say this to people\n\n321\n00:15:25.510 --> 00:15:25.880\nand certainly\n\n322\n00:15:25.880 --> 00:15:27.200\nyoung people in a career.\n\n323\n00:15:27.200 --> 00:15:30.280\nSo I was in strategic planning for two and a half years.\n\n324\n00:15:30.280 --> 00:15:35.040\nI was doing some really interesting assignments, but I was really impatient and\n\n325\n00:15:35.040 --> 00:15:35.640\nI wanted the\n\n326\n00:15:35.640 --> 00:15:37.760\nnext opportunity.\n\n327\n00:15:37.760 --> 00:15:41.400\nAnd I was offered a promotion in the cart business.\n\n328\n00:15:41.400 --> 00:15:44.930\nAnd at that time, I don't know if they're innovative enough, which you're\n\n329\n00:15:44.930 --> 00:15:45.320\ntalking about\n\n330\n00:15:45.320 --> 00:15:47.040\na pretty innovative group.\n\n331\n00:15:47.040 --> 00:15:52.400\nAnd so I was concerned that I wasn't moving fast enough in the company.\n\n332\n00:15:52.400 --> 00:15:57.820\nAnd I got this opportunity to work in a business called merchandise sales,\n\n333\n00:15:57.820 --> 00:15:59.480\nwhich sold merchandise\n\n334\n00:15:59.480 --> 00:16:05.840\nthrough the mail, electronics, stereo systems for coats, jewelry.\n\n335\n00:16:05.840 --> 00:16:07.520\nIt was unbelievable.\n\n336\n00:16:07.520 --> 00:16:13.600\nAnd it was a business that had like 100, 150 million in sales, was losing money\n\n337\n00:16:13.600 --> 00:16:13.720\n.\n\n338\n00:16:13.720 --> 00:16:17.360\nAnd I go there and Lou said, Ken, do not go there.\n\n339\n00:16:17.360 --> 00:16:18.440\nThis is a dog business.\n\n340\n00:16:18.440 --> 00:16:20.760\nI'm thinking of closing this business down.\n\n341\n00:16:20.760 --> 00:16:22.080\nI wouldn't do it.\n\n342\n00:16:22.080 --> 00:16:26.970\nAnd I said, Lou, I think this business is exciting because it has a direct\n\n343\n00:16:26.970 --> 00:16:28.640\nmarketing platform.\n\n344\n00:16:28.640 --> 00:16:32.040\nI just learned what direct marketing was.\n\n345\n00:16:32.040 --> 00:16:34.480\nAnd it sold all this merchandise through the mail.\n\n346\n00:16:34.480 --> 00:16:38.360\nSo you think about a precursor to Amazon that was there.\n\n347\n00:16:38.360 --> 00:16:43.760\nAnd so that was a turning point for me because in three years, we got up to\n\n348\n00:16:43.760 --> 00:16:45.600\nover 600 million\n\n349\n00:16:45.600 --> 00:16:46.600\nin sales.\n\n350\n00:16:46.600 --> 00:16:48.400\nIt became very profitable.\n\n351\n00:16:48.400 --> 00:16:53.520\nWe became one of the top 10 direct mail merchandisers in the world.\n\n352\n00:16:53.520 --> 00:16:56.720\nAnd then I tried to buy the company from American Express.\n\n353\n00:16:56.720 --> 00:16:59.440\nI got it through every level.\n\n354\n00:16:59.440 --> 00:17:02.520\nAnd then Lou Gerstner said, no.\n\n355\n00:17:02.520 --> 00:17:05.720\nAnd I was furious, furious.\n\n356\n00:17:05.720 --> 00:17:12.240\nI quit for Dave and Lou said appropriately, you're a spoiled brat.\n\n357\n00:17:12.240 --> 00:17:14.000\nYou've got an opportunity here.\n\n358\n00:17:14.000 --> 00:17:15.280\nCome back in here.\n\n359\n00:17:15.280 --> 00:17:16.840\nAnd I did.\n\n360\n00:17:16.840 --> 00:17:20.430\nSo that was really a pivotal moment in your career where you took something\n\n361\n00:17:20.430 --> 00:17:21.040\nthat nobody\n\n362\n00:17:21.040 --> 00:17:24.160\nelse would want and turn it into something you wanted to buy.\n\n363\n00:17:24.160 --> 00:17:25.160\nThat's fantastic.\n\n364\n00:17:25.160 --> 00:17:29.190\nYou know, Ken, you rose to the ranks of American Express based on that and\n\n365\n00:17:29.190 --> 00:17:30.280\nother things that\n\n366\n00:17:30.280 --> 00:17:31.280\nyou did.\n\n367\n00:17:31.280 --> 00:17:35.300\nIt became the third African American in the history of Fortune 500 companies to\n\n368\n00:17:35.300 --> 00:17:35.680\nbecome\n\n369\n00:17:35.680 --> 00:17:36.680\na CEO.\n\n370\n00:17:36.680 --> 00:17:41.370\nDid you have any insecurities as a black man in an overwhelmingly white\n\n371\n00:17:41.370 --> 00:17:42.280\nindustry?\n\n372\n00:17:42.280 --> 00:17:44.040\nAnd how did you overcome them?\n\n373\n00:17:44.040 --> 00:17:51.990\nYou know, what's interesting here and I think is important is that I clearly\n\n374\n00:17:51.990 --> 00:17:54.000\nfelt some prejudice\n\n375\n00:17:54.000 --> 00:17:55.280\nat the company.\n\n376\n00:17:55.280 --> 00:17:59.980\nBut what I would also say is there were a number of people who really were\n\n377\n00:17:59.980 --> 00:18:01.080\ninstrumental in\n\n378\n00:18:01.080 --> 00:18:02.480\nhelping me.\n\n379\n00:18:02.480 --> 00:18:07.180\nAnd as you know, having been a CEO, there's not room for a hundred people at\n\n380\n00:18:07.180 --> 00:18:07.960\nthe top.\n\n381\n00:18:07.960 --> 00:18:13.230\nAnd so my first 10 years with the company, I wasn't thinking about being CEO at\n\n382\n00:18:13.230 --> 00:18:13.800\nall.\n\n383\n00:18:13.800 --> 00:18:18.300\nI was thinking about learning a set of skills and capabilities and then maybe\n\n384\n00:18:18.300 --> 00:18:18.880\nstarting my\n\n385\n00:18:18.880 --> 00:18:20.680\nown business.\n\n386\n00:18:20.680 --> 00:18:24.820\nAnd only after around 10 years, a number of people said to me, you've got the\n\n387\n00:18:24.820 --> 00:18:25.480\npotential\n\n388\n00:18:25.480 --> 00:18:27.040\nthat you can go to the top.\n\n389\n00:18:27.040 --> 00:18:33.730\nSo there were people obviously like Lugersener, Harvey Gollop, Jim Robinson,\n\n390\n00:18:33.730 --> 00:18:34.720\nall different\n\n391\n00:18:34.720 --> 00:18:42.900\npersonalities, but were really interested in my development and really helped\n\n392\n00:18:42.900 --> 00:18:44.240\nme succeed.\n\n393\n00:18:44.240 --> 00:18:48.170\nAnd I would say the other thing that I really believe, particularly in the\n\n394\n00:18:48.170 --> 00:18:49.160\nfractious times\n\n395\n00:18:49.160 --> 00:18:50.160\nwere in.\n\n396\n00:18:50.160 --> 00:18:58.350\nI was able to gain the commitment and the loyalty of my colleagues across the\n\n397\n00:18:58.350 --> 00:18:59.680\nboard at American\n\n398\n00:18:59.680 --> 00:19:00.680\nExpress.\n\n399\n00:19:00.680 --> 00:19:06.550\nSo building a trusted relationship and demonstrating to people that, yeah, you\n\n400\n00:19:06.550 --> 00:19:08.160\nhave high standards,\n\n401\n00:19:08.160 --> 00:19:11.560\nperformance is critical, but you care about them.\n\n402\n00:19:11.560 --> 00:19:17.350\nAnd so 50% of the people probably had very different political views than I did\n\n403\n00:19:17.350 --> 00:19:17.440\n.\n\n404\n00:19:17.440 --> 00:19:21.720\nSo what we did was we found common ground and the mission and objectives of the\n\n405\n00:19:21.720 --> 00:19:22.240\ncompany\n\n406\n00:19:22.240 --> 00:19:24.080\nreally were important.\n\n407\n00:19:24.080 --> 00:19:29.810\nSo what I would say is I felt more of an impact externally than I did\n\n408\n00:19:29.810 --> 00:19:31.160\ninternally.\n\n409\n00:19:31.160 --> 00:19:36.700\nNow internally, I did have some people say to me, boy, the best you can do is\n\n410\n00:19:36.700 --> 00:19:37.600\nto be a\n\n411\n00:19:37.600 --> 00:19:38.760\ndivision president.\n\n412\n00:19:38.760 --> 00:19:44.270\nThere is no way that American Express would ever have a black person as CEO of\n\n413\n00:19:44.270 --> 00:19:45.520\nthe company.\n\n414\n00:19:45.520 --> 00:19:49.360\nAnd frankly, what I did in that situation is I just ignored them.\n\n415\n00:19:49.360 --> 00:19:50.840\nI just said, screw them.\n\n416\n00:19:50.840 --> 00:19:53.720\nI'm going to do the best I can do.\n\n417\n00:19:53.720 --> 00:19:55.760\nAnd I think I'm going to have an opportunity.\n\n418\n00:19:55.760 --> 00:19:59.760\nYou think about the black people that are coming up in business today.\n\n419\n00:19:59.760 --> 00:20:04.460\nWhat could you tell someone that is not of color in terms of how to help people\n\n420\n00:20:04.460 --> 00:20:04.840\nrise\n\n421\n00:20:04.840 --> 00:20:08.570\nand what do you tell people who are of color, how they should really grow\n\n422\n00:20:08.570 --> 00:20:10.160\nwithin the organization?\n\n423\n00:20:10.160 --> 00:20:12.440\nYeah, I think that's a great question, David.\n\n424\n00:20:12.440 --> 00:20:16.630\nYou know, one of the things that I think is important and this goes to really\n\n425\n00:20:16.630 --> 00:20:17.240\ndeciding\n\n426\n00:20:17.240 --> 00:20:19.560\nwhat you want in your culture and what you need.\n\n427\n00:20:19.560 --> 00:20:24.400\nWhat was terrific about American Express is we're in the service business and\n\n428\n00:20:24.400 --> 00:20:25.120\nyou've got\n\n429\n00:20:25.120 --> 00:20:27.120\nto be focused on people.\n\n430\n00:20:27.120 --> 00:20:31.920\nAnd so part of the culture is how do we embrace people?\n\n431\n00:20:31.920 --> 00:20:37.790\nAnd so to embrace people, what I would say to our white colleagues is talk to\n\n432\n00:20:37.790 --> 00:20:38.240\nyour black\n\n433\n00:20:38.240 --> 00:20:44.770\nemployees as a group and on an individual basis, try to understand some of the\n\n434\n00:20:44.770 --> 00:20:45.480\nissues\n\n435\n00:20:45.480 --> 00:20:47.040\nthat they're facing.\n\n436\n00:20:47.040 --> 00:20:48.040\nGet in dialogue.\n\n437\n00:20:48.040 --> 00:20:50.480\nDon't be afraid to talk about race issues.\n\n438\n00:20:50.480 --> 00:20:53.800\nI mean, race is America's greatest unsolved problem.\n\n439\n00:20:53.800 --> 00:20:55.480\nSo talk about it.\n\n440\n00:20:55.480 --> 00:20:56.960\nAsk people how they feel.\n\n441\n00:20:56.960 --> 00:21:02.630\nSecond, what I would say very importantly is you got to focus on bringing about\n\n442\n00:21:02.630 --> 00:21:03.440\nchange.\n\n443\n00:21:03.440 --> 00:21:06.600\nSo what's the representation at your company?\n\n444\n00:21:06.600 --> 00:21:09.640\nWho are some of the people that you're mentoring?\n\n445\n00:21:09.640 --> 00:21:13.250\nAnd as you know, David, given the number of people that you've mentored, the\n\n446\n00:21:13.250 --> 00:21:13.760\nreality\n\n447\n00:21:13.760 --> 00:21:16.200\nis picking a few people.\n\n448\n00:21:16.200 --> 00:21:21.600\nSo one of the things I talk about is in leadership and diversity is the handful\n\n449\n00:21:21.600 --> 00:21:22.440\ntheory.\n\n450\n00:21:22.440 --> 00:21:27.560\nThey're a handful of people in any company that can rise to the top.\n\n451\n00:21:27.560 --> 00:21:31.420\nMake sure you got some black and brown people in that handful that you're\n\n452\n00:21:31.420 --> 00:21:32.440\nnurturing, that\n\n453\n00:21:32.440 --> 00:21:36.170\nyou're building, that you're taking through, as well as looking at overall\n\n454\n00:21:36.170 --> 00:21:37.080\nrepresentation\n\n455\n00:21:37.080 --> 00:21:38.440\ngoals.\n\n456\n00:21:38.440 --> 00:21:42.080\nBecause getting leaders in the right place does make a big difference.\n\n457\n00:21:42.080 --> 00:21:46.490\nThe other thing that I think is very important in a company is don't tolerate\n\n458\n00:21:46.490 --> 00:21:48.000\nbehavior that\n\n459\n00:21:48.000 --> 00:21:49.840\nmarginalizes people.\n\n460\n00:21:49.840 --> 00:21:54.750\nAnd so if in a private moment you hear something that you know is not\n\n461\n00:21:54.750 --> 00:21:56.520\nappropriate from a racial\n\n462\n00:21:56.520 --> 00:22:01.110\ngender standpoint, ask yourself, are you saying to the person, look, that's out\n\n463\n00:22:01.110 --> 00:22:02.000\nof line?\n\n464\n00:22:02.000 --> 00:22:03.000\nWhy did you say that?\n\n465\n00:22:03.000 --> 00:22:04.160\nWhat are the issues?\n\n466\n00:22:04.160 --> 00:22:07.160\nBecause that's important in the culture that you're trying to create.\n\n467\n00:22:07.160 --> 00:22:11.860\nSo it's not just what you do publicly, but what you do privately that I think\n\n468\n00:22:11.860 --> 00:22:13.040\nis important.\n\n469\n00:22:13.040 --> 00:22:15.880\nFor black employees, I'll tell you what I say to them.\n\n470\n00:22:15.880 --> 00:22:20.120\nAt the end of the day, I give them a line that my father would say to me, look,\n\n471\n00:22:20.120 --> 00:22:20.160\nthere\n\n472\n00:22:20.160 --> 00:22:22.160\nare a lot of problems in this world.\n\n473\n00:22:22.160 --> 00:22:26.570\nThere are a lot of things and you should do everything you can to overcome them\n\n474\n00:22:26.570 --> 00:22:26.640\n.\n\n475\n00:22:26.640 --> 00:22:30.840\nBut can the one thing you can control is your performance.\n\n476\n00:22:30.840 --> 00:22:32.800\nYou know when you're at your best.\n\n477\n00:22:32.800 --> 00:22:38.390\nNumber one, number two is where you see issues in the company advocate because\n\n478\n00:22:38.390 --> 00:22:39.160\nat the end\n\n479\n00:22:39.160 --> 00:22:45.360\nof the day, if you don't, you're allowing an environment to persist.\n\n480\n00:22:45.360 --> 00:22:51.400\nThird is ensure that real focus and lasting focus is given to diversity\n\n481\n00:22:51.400 --> 00:22:52.840\nthroughout the\n\n482\n00:22:52.840 --> 00:22:54.080\ncompany.\n\n483\n00:22:54.080 --> 00:22:59.160\nBut also one of the things that I did, for example, when we first formed our\n\n484\n00:22:59.160 --> 00:23:00.120\nblack employee\n\n485\n00:23:00.120 --> 00:23:06.360\nnetwork, I put a white guy in charge of it because I said, you know, why is it\n\n486\n00:23:06.360 --> 00:23:06.880\nthat the\n\n487\n00:23:06.880 --> 00:23:09.560\nblack guy is the one who's got to solve the racial problem?\n\n488\n00:23:09.560 --> 00:23:11.640\nIt's both of us have to deal with it.\n\n489\n00:23:11.640 --> 00:23:15.330\nAnd so yeah, you're going to be head of the black affinity network for a period\n\n490\n00:23:15.330 --> 00:23:15.960\nof time.\n\n491\n00:23:15.960 --> 00:23:18.760\nSome of the black employees said to me, can't how can you do this?\n\n492\n00:23:18.760 --> 00:23:21.120\nI said, because this is a shared accountability here.\n\n493\n00:23:21.120 --> 00:23:22.480\nThis is what we have to do.\n\n494\n00:23:22.480 --> 00:23:26.630\nYou know, because I think part of what we all have to do in our life and in\n\n495\n00:23:26.630 --> 00:23:27.400\nbusiness is\n\n496\n00:23:27.400 --> 00:23:29.960\nwe've got to put ourselves in the other person's shoes.\n\n497\n00:23:29.960 --> 00:23:32.960\nWe've got to understand what it really feels like.\n\n498\n00:23:32.960 --> 00:23:37.080\nAnd I think if we do those things, we're going to be better off as a society.\n\n499\n00:23:37.080 --> 00:23:44.160\nYou talked earlier about the importance of productive, positive confrontation.\n\n500\n00:23:44.160 --> 00:23:48.390\nDid you ever get some coaching from someone that surprised you and how did you\n\n501\n00:23:48.390 --> 00:23:48.840\nhandle\n\n502\n00:23:48.840 --> 00:23:49.840\nit?\n\n503\n00:23:49.840 --> 00:23:50.840\nYeah.\n\n504\n00:23:50.840 --> 00:23:54.120\nSo David, you know, at the end of the day, there's nothing like feedback.\n\n505\n00:23:54.120 --> 00:23:55.120\nAll right.\n\n506\n00:23:55.120 --> 00:24:01.560\nSo in my mid 30s, and I thought I was a hard charging guy, I thought I was a\n\n507\n00:24:01.560 --> 00:24:02.680\ngood guy.\n\n508\n00:24:02.680 --> 00:24:06.680\nI thought I treated people respectfully, but I was very driven from a\n\n509\n00:24:06.680 --> 00:24:08.400\nperformance standpoint.\n\n510\n00:24:08.400 --> 00:24:10.200\nSo we had this upward feedback.\n\n511\n00:24:10.200 --> 00:24:14.990\nAnd as you know, there's always 10 things you do well, five to 10 things you\n\n512\n00:24:14.990 --> 00:24:15.720\ncan improve.\n\n513\n00:24:15.720 --> 00:24:21.030\nBut the most glaring thing for me was the feedback was, can you are not a good\n\n514\n00:24:21.030 --> 00:24:22.120\nlistener?\n\n515\n00:24:22.120 --> 00:24:24.600\nI said, give me a break.\n\n516\n00:24:24.600 --> 00:24:26.320\nI'm not a good listener.\n\n517\n00:24:26.320 --> 00:24:28.120\nI mean, I'm not I'm nice to people.\n\n518\n00:24:28.120 --> 00:24:30.960\nThey said, no, here's what we feel.\n\n519\n00:24:30.960 --> 00:24:37.030\nIf you don't feel someone is saying something that is really impactful, you\n\n520\n00:24:37.030 --> 00:24:38.080\nzone out.\n\n521\n00:24:38.080 --> 00:24:41.720\nIn fact, we have a term for it, the kin zone.\n\n522\n00:24:41.720 --> 00:24:44.280\nAnd you just like ignore.\n\n523\n00:24:44.280 --> 00:24:48.130\nAnd so, you know, at the end of the day, David, what they were saying is you're\n\n524\n00:24:48.130 --> 00:24:49.000\ndisrespecting\n\n525\n00:24:49.000 --> 00:24:50.040\nme.\n\n526\n00:24:50.040 --> 00:24:51.920\nAnd you only give us like two minutes.\n\n527\n00:24:51.920 --> 00:24:56.510\nIf we don't say something that really is on your agenda or you think is really\n\n528\n00:24:56.510 --> 00:24:57.320\nbright,\n\n529\n00:24:57.320 --> 00:24:58.320\nyou're out.\n\n530\n00:24:58.320 --> 00:25:02.320\nI was devastated, devastated because it was there was no gray area.\n\n531\n00:25:02.320 --> 00:25:04.320\nIt was clear.\n\n532\n00:25:04.320 --> 00:25:07.080\nSo, you know, I go through my performance plan.\n\n533\n00:25:07.080 --> 00:25:10.800\nI do this stuff, you know, after three months, I go back.\n\n534\n00:25:10.800 --> 00:25:11.800\nAll right, let's see.\n\n535\n00:25:11.800 --> 00:25:13.800\nI know there's going to be a big improvement.\n\n536\n00:25:13.800 --> 00:25:17.390\nAnd one of the things was the harsh reality is, as you know, it is really hard\n\n537\n00:25:17.390 --> 00:25:17.920\nto change\n\n538\n00:25:17.920 --> 00:25:19.560\nperceptions.\n\n539\n00:25:19.560 --> 00:25:24.400\nSo it took around two years and then literally five years later, I remember\n\n540\n00:25:24.400 --> 00:25:25.640\nsomeone saying,\n\n541\n00:25:25.640 --> 00:25:28.330\nyou know, Ken, one of the things that's really remarkable about you is you're a\n\n542\n00:25:28.330 --> 00:25:29.480\ngood listener.\n\n543\n00:25:29.480 --> 00:25:32.640\nAnd I just laughed and said, let me tell you the story.\n\n544\n00:25:32.640 --> 00:25:38.400\nAnd so what I really believe, David, is that all of us have areas that we need\n\n545\n00:25:38.400 --> 00:25:39.000\nto work\n\n546\n00:25:39.000 --> 00:25:40.000\non.\n\n547\n00:25:40.000 --> 00:25:46.160\nAnd one of the things that I saw was being an active listener was critical.\n\n548\n00:25:46.160 --> 00:25:52.190\nI was actually losing out on ideas, even though I wasn't abrasive, I was belitt\n\n549\n00:25:52.190 --> 00:25:53.080\nling people.\n\n550\n00:25:53.080 --> 00:25:57.700\nI was saying, if you don't show me, you're really bright and you've got a great\n\n551\n00:25:57.700 --> 00:25:58.400\nidea.\n\n552\n00:25:58.400 --> 00:26:01.440\nIn two minutes, I'm going to zone out.\n\n553\n00:26:01.440 --> 00:26:05.520\nAnd so that was one of the most important interventions.\n\n554\n00:26:05.520 --> 00:26:10.160\nAnd I realized how serious it was going to be to my success as a leader.\n\n555\n00:26:10.160 --> 00:26:13.320\nYou mentioned the number of people that really helped you in your career and\n\n556\n00:26:13.320 --> 00:26:14.120\ntook an interest\n\n557\n00:26:14.120 --> 00:26:18.160\nin you, but it sounds like you're a really good self coach.\n\n558\n00:26:18.160 --> 00:26:21.490\nSounds like you're constantly evaluating yourself and trying to take your\n\n559\n00:26:21.490 --> 00:26:22.560\nperformance the next\n\n560\n00:26:22.560 --> 00:26:23.560\nlevel.\n\n561\n00:26:23.560 --> 00:26:24.560\nIs that fair to say?\n\n562\n00:26:24.560 --> 00:26:28.080\nYeah, I think some of it may come from sports.\n\n563\n00:26:28.080 --> 00:26:32.870\nI was a really intense athlete and really from a pretty young age sort of would\n\n564\n00:26:32.870 --> 00:26:33.400\nanalyze\n\n565\n00:26:33.400 --> 00:26:35.360\nafter a baseball game or a basketball.\n\n566\n00:26:35.360 --> 00:26:36.360\nWhat did I do right?\n\n567\n00:26:36.360 --> 00:26:37.360\nWhat did I do wrong?\n\n568\n00:26:37.360 --> 00:26:42.780\nAnd I've just sort of developed the habit of constantly reassessing and areas\n\n569\n00:26:42.780 --> 00:26:43.240\nthat I\n\n570\n00:26:43.240 --> 00:26:47.200\nneed to work on and improve and learn.\n\n571\n00:26:47.200 --> 00:26:50.160\nAnd I think status quo is the enemy in business.\n\n572\n00:26:50.160 --> 00:26:52.640\nAnd I think it's the enemy in life.\n\n573\n00:26:52.640 --> 00:26:57.840\nIf you say, I got it all, I just don't think you're a learning person.\n\n574\n00:26:57.840 --> 00:27:01.560\nWell when it comes to business, kid, you didn't deal with the status quo very\n\n575\n00:27:01.560 --> 00:27:02.560\noften.\n\n576\n00:27:02.560 --> 00:27:07.200\nRight after you became CEO, if I recall, you had 9/11.\n\n577\n00:27:07.200 --> 00:27:10.840\nAnd then in 2008, you had the financial crisis.\n\n578\n00:27:10.840 --> 00:27:15.240\nI was on the board, a JP Borg and Chase, and I mean everybody was like going\n\n579\n00:27:15.240 --> 00:27:16.200\ncrazy at that\n\n580\n00:27:16.200 --> 00:27:17.200\npoint in time.\n\n581\n00:27:17.200 --> 00:27:22.200\nYou had to lead through those two tough times and other tough times.\n\n582\n00:27:22.200 --> 00:27:25.760\nWhat's your biggest learnings on how to handle adversity?\n\n583\n00:27:25.760 --> 00:27:30.320\nMy leadership, Mantra, David, and I literally think about this every day is the\n\n584\n00:27:30.320 --> 00:27:30.840\nrole of\n\n585\n00:27:30.840 --> 00:27:34.640\na leader is to define reality and give hope.\n\n586\n00:27:34.640 --> 00:27:40.620\nAnd so in a crisis, what is really important and it's difficult in normal times\n\n587\n00:27:40.620 --> 00:27:41.480\n, but particularly\n\n588\n00:27:41.480 --> 00:27:44.640\nin a crisis, is how do you define reality?\n\n589\n00:27:44.640 --> 00:27:49.790\nHow do you focus on some of the short term issues that can get you through the\n\n590\n00:27:49.790 --> 00:27:50.520\ncrisis,\n\n591\n00:27:50.520 --> 00:27:53.920\nbut do it in the context of a long term strategy?\n\n592\n00:27:53.920 --> 00:27:55.760\nAnd that's really important to me.\n\n593\n00:27:55.760 --> 00:28:01.520\nI think it's really critical in a crisis is to articulate the principles that\n\n594\n00:28:01.520 --> 00:28:02.080\nyou're\n\n595\n00:28:02.080 --> 00:28:04.480\ngoing to use to prioritize.\n\n596\n00:28:04.480 --> 00:28:10.960\nAnd so in the financial crisis, I had three principles, stay liquid.\n\n597\n00:28:10.960 --> 00:28:12.640\nThat was really critical.\n\n598\n00:28:12.640 --> 00:28:16.210\nAnd I explained that to the organization, every level of the organization, what\n\n599\n00:28:16.210 --> 00:28:16.520\ndid it\n\n600\n00:28:16.520 --> 00:28:18.080\nmean to stay liquid?\n\n601\n00:28:18.080 --> 00:28:19.200\nStay profitable.\n\n602\n00:28:19.200 --> 00:28:23.160\nAnd that was both reality and hope that I thought we could do it, but here is\n\n603\n00:28:23.160 --> 00:28:23.600\nwhy it's\n\n604\n00:28:23.600 --> 00:28:25.800\nimportant for us.\n\n605\n00:28:25.800 --> 00:28:30.600\nAnd third, even in the financial crisis, selectively invest in growth.\n\n606\n00:28:30.600 --> 00:28:34.600\nSo those are competing tensions and people would say to me, well, Ken, you're\n\n607\n00:28:34.600 --> 00:28:35.040\ncutting\n\n608\n00:28:35.040 --> 00:28:38.520\ncosts, but you're saying we should invest in growth.\n\n609\n00:28:38.520 --> 00:28:39.520\nAnd I said, that's right.\n\n610\n00:28:39.520 --> 00:28:44.000\nWe've got to prioritize, but it is not going to be, we're not going to invest\n\n611\n00:28:44.000 --> 00:28:44.600\nin growth\n\n612\n00:28:44.600 --> 00:28:46.600\nand we're just going to cut costs.\n\n613\n00:28:46.600 --> 00:28:47.880\nWe've got to do both.\n\n614\n00:28:47.880 --> 00:28:53.040\nBut those principles were helpful to frame for the organization.\n\n615\n00:28:53.040 --> 00:28:54.480\nHow are we doing?\n\n616\n00:28:54.480 --> 00:28:59.920\nWhat are some of the markers of progress on a weekly or a monthly basis?\n\n617\n00:28:59.920 --> 00:29:03.720\nSome of it's qualitative, some of it's quantitative.\n\n618\n00:29:03.720 --> 00:29:10.320\nBut I think what is also important and fundamental in a crisis is people have\n\n619\n00:29:10.320 --> 00:29:12.200\nto trust you because\n\n620\n00:29:12.200 --> 00:29:15.750\nyou're going to make decisions and you're going to take actions, even though\n\n621\n00:29:15.750 --> 00:29:16.160\nyou try\n\n622\n00:29:16.160 --> 00:29:20.600\nto give as much context as you can, that people will say, Ken, Dave, I don't\n\n623\n00:29:20.600 --> 00:29:21.120\nknow if this is\n\n624\n00:29:21.120 --> 00:29:22.440\ngoing to work.\n\n625\n00:29:22.440 --> 00:29:25.200\nBut then at the end of the day, will they trust you?\n\n626\n00:29:25.200 --> 00:29:30.020\nAnd part of what you have to do in a crisis is you have to be decisive, very\n\n627\n00:29:30.020 --> 00:29:30.880\ndecisive,\n\n628\n00:29:30.880 --> 00:29:31.880\nand you have to be compassionate.\n\n629\n00:29:31.880 --> 00:29:34.800\nYou know, you mentioned that you had to cut costs.\n\n630\n00:29:34.800 --> 00:29:38.120\nAnd I remember you talking to me once, I don't know if you remember this, but\n\n631\n00:29:38.120 --> 00:29:38.880\nyou talk about\n\n632\n00:29:38.880 --> 00:29:43.480\nthe tough challenge of restructuring and reducing head count.\n\n633\n00:29:43.480 --> 00:29:47.080\nAnd how do you balance that compassion and being decisive?\n\n634\n00:29:47.080 --> 00:29:49.440\nBecause you had to do that after 9/11.\n\n635\n00:29:49.440 --> 00:29:52.080\nYou had to do that after the financial crisis.\n\n636\n00:29:52.080 --> 00:29:55.320\nYeah, I think 9/11 is probably a good illustration.\n\n637\n00:29:55.320 --> 00:30:01.890\nWe lost 11 of our colleagues that perished in the North Tower of the World\n\n638\n00:30:01.890 --> 00:30:03.200\nTrade Center.\n\n639\n00:30:03.200 --> 00:30:06.720\nAnd our business was in free fall.\n\n640\n00:30:06.720 --> 00:30:10.370\nWe thought particularly also with the acceleration of the digital\n\n641\n00:30:10.370 --> 00:30:12.080\ntransformation, travel was\n\n642\n00:30:12.080 --> 00:30:13.080\nchanging.\n\n643\n00:30:13.080 --> 00:30:17.640\nSo we decided we had to cut close to 15% of our workforce.\n\n644\n00:30:17.640 --> 00:30:22.510\nAnd there were a number of people in my organization that had legitimate\n\n645\n00:30:22.510 --> 00:30:23.960\nconcerns and said, Ken,\n\n646\n00:30:23.960 --> 00:30:27.600\nthe organization is in a really tough emotional state.\n\n647\n00:30:27.600 --> 00:30:29.720\nYou shouldn't take this action.\n\n648\n00:30:29.720 --> 00:30:34.010\nAnd I said, the problem is, if we don't act, I think we're going to put the\n\n649\n00:30:34.010 --> 00:30:34.720\ncompany in\n\n650\n00:30:34.720 --> 00:30:36.600\na very bad position.\n\n651\n00:30:36.600 --> 00:30:38.720\nAnd I said, we need to act now.\n\n652\n00:30:38.720 --> 00:30:45.560\nSo literally a month and a half after 9/11, we announced these cuts.\n\n653\n00:30:45.560 --> 00:30:50.420\nAnd what I tried to do there, David, was explain to the organization that it\n\n654\n00:30:50.420 --> 00:30:51.920\nwas not their fault.\n\n655\n00:30:51.920 --> 00:30:53.240\nHere are the market realities.\n\n656\n00:30:53.240 --> 00:30:55.280\nHere are the competitive realities.\n\n657\n00:30:55.280 --> 00:31:00.600\nAnd I think at the end of the day, there is no easy way of doing it.\n\n658\n00:31:00.600 --> 00:31:07.310\nBut ultimately, people need to believe that these were painful actions that you\n\n659\n00:31:07.310 --> 00:31:08.040\nwere taking\n\n660\n00:31:08.040 --> 00:31:10.160\nand you understood what the pain was.\n\n661\n00:31:10.160 --> 00:31:16.810\nAnd one of the things that we still do is we have an employee survey that\n\n662\n00:31:16.810 --> 00:31:18.480\nactually counts\n\n663\n00:31:18.480 --> 00:31:21.520\npart of it in our incentive compensation.\n\n664\n00:31:21.520 --> 00:31:25.990\nAnd people said to me, don't do the employee survey this year because you're\n\n665\n00:31:25.990 --> 00:31:26.440\ndoing these\n\n666\n00:31:26.440 --> 00:31:27.440\nlayoffs.\n\n667\n00:31:27.440 --> 00:31:28.760\nAnd I said, no, we're going to do the employee survey.\n\n668\n00:31:28.760 --> 00:31:30.520\nWe've got to be accountable.\n\n669\n00:31:30.520 --> 00:31:35.080\nAnd the reality is we ended up getting a little bit higher scores.\n\n670\n00:31:35.080 --> 00:31:39.150\nNow I think some of that was due to the environment and people understood the\n\n671\n00:31:39.150 --> 00:31:40.040\nsituation.\n\n672\n00:31:40.040 --> 00:31:43.400\nAnd I would say, David, I haven't found the easy way of doing it.\n\n673\n00:31:43.400 --> 00:31:46.800\nBut what I firmly believe is you've got to act.\n\n674\n00:31:46.800 --> 00:31:48.720\nYou've got to act decisively.\n\n675\n00:31:48.720 --> 00:31:50.080\nDon't procrastinate.\n\n676\n00:31:50.080 --> 00:31:52.800\nAnd then tell people, this is really painful.\n\n677\n00:31:52.800 --> 00:31:54.280\nBut why you had to do it?\n\n678\n00:31:54.280 --> 00:31:58.360\nYou know, I think that whole notion of having people understand that you\n\n679\n00:31:58.360 --> 00:31:59.680\nunderstand the pain,\n\n680\n00:31:59.680 --> 00:32:03.120\neven though you can never feel what they feel is so key.\n\n681\n00:32:03.120 --> 00:32:07.680\nYou know, speaking to making tough calls, you talked about the decision you\n\n682\n00:32:07.680 --> 00:32:08.640\nmade on whether\n\n683\n00:32:08.640 --> 00:32:13.240\nor not to do a deal with Costco just before you left as CEO.\n\n684\n00:32:13.240 --> 00:32:14.680\nWould you mind talking about that?\n\n685\n00:32:14.680 --> 00:32:15.680\nSure.\n\n686\n00:32:15.680 --> 00:32:18.880\nAnd let me say at the end of the day, Costco is a great company.\n\n687\n00:32:18.880 --> 00:32:20.600\nThey're doing really well.\n\n688\n00:32:20.600 --> 00:32:26.220\nBut we came up with a concept and I was very involved in developing that\n\n689\n00:32:26.220 --> 00:32:28.040\nconcept with Costco\n\n690\n00:32:28.040 --> 00:32:32.920\nin the 90s to issue a co-branded American Express card.\n\n691\n00:32:32.920 --> 00:32:39.840\nWhat you got to remember is that type of product was a real innovation at that\n\n692\n00:32:39.840 --> 00:32:40.480\ntime.\n\n693\n00:32:40.480 --> 00:32:46.930\nAnd Costco had had a relationship with Discover before and we created a very\n\n694\n00:32:46.930 --> 00:32:48.480\nintegrated product\n\n695\n00:32:48.480 --> 00:32:50.840\nportfolio for Costco.\n\n696\n00:32:50.840 --> 00:32:54.000\nAnd it was terrifically successful.\n\n697\n00:32:54.000 --> 00:32:57.600\nAnd the contract was renewed two or three times.\n\n698\n00:32:57.600 --> 00:33:02.040\nThen in the mid-2000s, the contract was a lapsing.\n\n699\n00:33:02.040 --> 00:33:04.440\nCostco decided to put it out for bid.\n\n700\n00:33:04.440 --> 00:33:06.040\nWe certainly bid for the deal.\n\n701\n00:33:06.040 --> 00:33:07.280\nWe wanted the deal.\n\n702\n00:33:07.280 --> 00:33:14.150\nBut I also, back to the fine reality, I told the board, \"We may not get this\n\n703\n00:33:14.150 --> 00:33:15.080\nand here's\n\n704\n00:33:15.080 --> 00:33:16.520\nthe limits for me.\n\n705\n00:33:16.520 --> 00:33:22.620\nI want to make sure that we're not going to do a deal that will damage our\n\n706\n00:33:22.620 --> 00:33:23.680\neconomics\n\n707\n00:33:23.680 --> 00:33:24.680\nfor the long term.\"\n\n708\n00:33:24.680 --> 00:33:31.840\nI'm going to be aggressive, but I also believe that we have the strength in our\n\n709\n00:33:31.840 --> 00:33:32.840\nfranchise\n\n710\n00:33:32.840 --> 00:33:37.360\nthat if we did not move forward, we could still be successful.\n\n711\n00:33:37.360 --> 00:33:38.760\nSo I want to be clear.\n\n712\n00:33:38.760 --> 00:33:40.960\nMy preference would have been to do the deal.\n\n713\n00:33:40.960 --> 00:33:45.280\nCostco decided that they wanted a set of economics that I did not think was the\n\n714\n00:33:45.280 --> 00:33:45.720\nright\n\n715\n00:33:45.720 --> 00:33:47.040\nthing for us.\n\n716\n00:33:47.040 --> 00:33:54.760\nAnd the tough thing here is unlike 9/11 in the financial crisis where we\n\n717\n00:33:54.760 --> 00:33:56.440\nperformed well,\n\n718\n00:33:56.440 --> 00:34:00.280\nbut we were with a group of people that had gone through some of the same\n\n719\n00:34:00.280 --> 00:34:01.200\nexperiences.\n\n720\n00:34:01.200 --> 00:34:04.560\nIn Costco, we were out there alone.\n\n721\n00:34:04.560 --> 00:34:08.240\nAnd so people were saying, \"Boy, American Express is really doing well.\n\n722\n00:34:08.240 --> 00:34:10.320\nKen's been really doing well.\n\n723\n00:34:10.320 --> 00:34:11.680\nHas he lost his mojo?\n\n724\n00:34:11.680 --> 00:34:13.000\nHe should have resigned.\"\n\n725\n00:34:13.000 --> 00:34:16.510\nAnd the reality is we could have done the deal and my successor, Steve Squeary,\n\n726\n00:34:16.510 --> 00:34:18.080\nwho's\n\n727\n00:34:18.080 --> 00:34:21.440\ndoing a terrific job, Steve would have been saddled with that.\n\n728\n00:34:21.440 --> 00:34:25.100\nAnd in fact, the impact wouldn't have been felt for even a few years after\n\n729\n00:34:25.100 --> 00:34:25.680\nSteve took\n\n730\n00:34:25.680 --> 00:34:26.680\nover.\n\n731\n00:34:26.680 --> 00:34:30.120\nAnd I just felt that wasn't in the right interest of the company.\n\n732\n00:34:30.120 --> 00:34:34.800\nBut I went through a period of around 18 months of people really questioning\n\n733\n00:34:34.800 --> 00:34:35.840\nthe strategy.\n\n734\n00:34:35.840 --> 00:34:39.960\nBut there, what we did, we set out clear objectives.\n\n735\n00:34:39.960 --> 00:34:42.640\nAnd fortunately, we were able to achieve it.\n\n736\n00:34:42.640 --> 00:34:43.640\nIt wasn't fun.\n\n737\n00:34:43.640 --> 00:34:47.880\nYou were like the Wall Street darling, everything you touched to turn to gold.\n\n738\n00:34:47.880 --> 00:34:50.680\nNow you have this Costco account.\n\n739\n00:34:50.680 --> 00:34:52.080\nYou lose that account.\n\n740\n00:34:52.080 --> 00:34:54.720\nThat's definitely going to hurt your bottom line for a couple of years.\n\n741\n00:34:54.720 --> 00:34:56.200\nThe stock's depressed.\n\n742\n00:34:56.200 --> 00:34:58.320\nNow you're not as smart, Ken.\n\n743\n00:34:58.320 --> 00:35:00.160\nHow did you deal with that?\n\n744\n00:35:00.160 --> 00:35:03.360\nSo what I did is one, David, what was important.\n\n745\n00:35:03.360 --> 00:35:06.240\nI really was convinced I was right.\n\n746\n00:35:06.240 --> 00:35:09.260\nBut one of the things I say to people is just because you're right doesn't mean\n\n747\n00:35:09.260 --> 00:35:09.760\nyou feel\n\n748\n00:35:09.760 --> 00:35:11.720\nterrific.\n\n749\n00:35:11.720 --> 00:35:18.820\nAnd so what I did both for the organization and investors is I gave the\n\n750\n00:35:18.820 --> 00:35:20.440\nrationale.\n\n751\n00:35:20.440 --> 00:35:24.040\nWe then set up what are some targets that we could achieve.\n\n752\n00:35:24.040 --> 00:35:29.000\nAnd as I said, it took us close to 18 months to get where we needed to.\n\n753\n00:35:29.000 --> 00:35:31.240\nBut we got there ahead of schedule.\n\n754\n00:35:31.240 --> 00:35:37.100\nAnd what is very, very clear now, and I still get some investors that will say\n\n755\n00:35:37.100 --> 00:35:39.040\nto me, boy,\n\n756\n00:35:39.040 --> 00:35:41.200\nthat was a really smart call.\n\n757\n00:35:41.200 --> 00:35:45.280\nAnd I wanted to say, boy, let me go back and read what you really said.\n\n758\n00:35:45.280 --> 00:35:47.880\nI don't remember you saying it was a smart call.\n\n759\n00:35:47.880 --> 00:35:50.320\nAnd so I think, David, you've been through this.\n\n760\n00:35:50.320 --> 00:35:51.920\nYou've done this.\n\n761\n00:35:51.920 --> 00:35:55.120\nYou've got to have the courage of your convictions.\n\n762\n00:35:55.120 --> 00:35:59.400\nBut you also have to be clear that you're going to be alone.\n\n763\n00:35:59.400 --> 00:36:03.000\nAnd at the end of the day, fortunately it worked out.\n\n764\n00:36:03.000 --> 00:36:06.760\nI could have been wrong, but fortunately I wasn't.\n\n765\n00:36:06.760 --> 00:36:11.140\nBut I think the more important lesson for me, and I would say from a leadership\n\n766\n00:36:11.140 --> 00:36:12.120\nstandpoint,\n\n767\n00:36:12.120 --> 00:36:18.460\nwe all are faced with choices that no one would have known that I made a short-\n\n768\n00:36:18.460 --> 00:36:20.120\nterm decision\n\n769\n00:36:20.120 --> 00:36:23.280\nwith Costco if we'd moved forward.\n\n770\n00:36:23.280 --> 00:36:24.960\nBut that wouldn't have been the right thing to do.\n\n771\n00:36:24.960 --> 00:36:30.100\nAnd I think you and a number of CEOs faced with those same facts would have\n\n772\n00:36:30.100 --> 00:36:30.680\nmade that\n\n773\n00:36:30.680 --> 00:36:33.000\nsame decision.\n\n774\n00:36:33.000 --> 00:36:37.480\nBut what we also would understand, you certainly wouldn't get the accolades.\n\n775\n00:36:37.480 --> 00:36:40.160\nIf you want the accolades, forget it.\n\n776\n00:36:40.160 --> 00:36:41.160\nIt's not going to happen.\n\n777\n00:36:41.160 --> 00:36:43.200\nIt'll be after the fact.\n\n778\n00:36:43.200 --> 00:36:47.470\nYou know, we're gone through this process of going through COVID, which has\n\n779\n00:36:47.470 --> 00:36:48.280\nbeen so hard\n\n780\n00:36:48.280 --> 00:36:50.880\non our country and the world.\n\n781\n00:36:50.880 --> 00:36:53.880\nWhat have you learned about your own leadership during COVID?\n\n782\n00:36:53.880 --> 00:36:57.440\nIt's really getting back to what's most important in your business.\n\n783\n00:36:57.440 --> 00:36:58.440\nWhat are the basics?\n\n784\n00:36:58.440 --> 00:37:03.420\nNumber one, number two is what are the values that are going to drive your\n\n785\n00:37:03.420 --> 00:37:04.680\ncompany and cast\n\n786\n00:37:04.680 --> 00:37:07.840\nyour actions in the context of your values?\n\n787\n00:37:07.840 --> 00:37:10.760\nBecause the organization really needs to see it.\n\n788\n00:37:10.760 --> 00:37:14.720\nAnd so when they're Airbnb had to do major layoffs.\n\n789\n00:37:14.720 --> 00:37:20.070\nAnd I think what was important is Brian Chesky was decisive, but it was also\n\n790\n00:37:20.070 --> 00:37:22.000\nvery compassionate.\n\n791\n00:37:22.000 --> 00:37:27.520\nWhat I've really learned through COVID is one, the importance boy, a fortifying\n\n792\n00:37:27.520 --> 00:37:28.760\nyourself,\n\n793\n00:37:28.760 --> 00:37:35.130\nbecause no matter what our position is in business or non-business, each of us\n\n794\n00:37:35.130 --> 00:37:36.280\nwas impacted\n\n795\n00:37:36.280 --> 00:37:40.380\nby COVID, obviously some at a far greater level.\n\n796\n00:37:40.380 --> 00:37:44.160\nBut for me, I sort of reexamined again, what should I stand for?\n\n797\n00:37:44.160 --> 00:37:45.280\nWhat's important to me?\n\n798\n00:37:45.280 --> 00:37:49.980\nAnd also to understand that there are a set of societal issues that have been\n\n799\n00:37:49.980 --> 00:37:50.720\ncreated by\n\n800\n00:37:50.720 --> 00:37:53.760\nCOVID that need to be addressed.\n\n801\n00:37:53.760 --> 00:37:58.170\nThere are a set of business challenges, but also there are a set of business\n\n802\n00:37:58.170 --> 00:37:59.160\nopportunities\n\n803\n00:37:59.160 --> 00:38:00.640\nas a result of COVID.\n\n804\n00:38:00.640 --> 00:38:04.400\nAnd I think that's part of what needs to do from a leadership standpoint is\n\n805\n00:38:04.400 --> 00:38:05.080\nunderstand\n\n806\n00:38:05.080 --> 00:38:08.120\nwhat are the marketplace changes that have occurred?\n\n807\n00:38:08.120 --> 00:38:10.880\nWhat are the competitive issues that are there?\n\n808\n00:38:10.880 --> 00:38:14.070\nAnd then what are the opportunities that you need to pursue with your\n\n809\n00:38:14.070 --> 00:38:15.360\nrespective business?\n\n810\n00:38:15.360 --> 00:38:19.670\nAnd I think that there are range of opportunities and at the same time, there\n\n811\n00:38:19.670 --> 00:38:21.600\nare a set of challenges\n\n812\n00:38:21.600 --> 00:38:28.900\nthat I think creative businesses can be very helpful in causing some relief,\n\n813\n00:38:28.900 --> 00:38:29.960\nbut also at\n\n814\n00:38:29.960 --> 00:38:34.560\nthe same time, I think can be very successful commercially.\n\n815\n00:38:34.560 --> 00:38:39.580\nKen, as I mentioned earlier, you were amazingly the third black man to become a\n\n816\n00:38:39.580 --> 00:38:40.880\nfortune 500\n\n817\n00:38:40.880 --> 00:38:41.880\nCEO.\n\n818\n00:38:41.880 --> 00:38:44.720\nYou know, that's such an accomplishment.\n\n819\n00:38:44.720 --> 00:38:48.920\nWhat responsibility do you feel to inspire young kids of color through your own\n\n820\n00:38:48.920 --> 00:38:49.400\npersonal\n\n821\n00:38:49.400 --> 00:38:50.400\nexample?\n\n822\n00:38:50.400 --> 00:38:54.850\nYeah, I think what's important there, there was a, you knew this person and he\n\n823\n00:38:54.850 --> 00:38:55.560\ncertainly\n\n824\n00:38:55.560 --> 00:39:00.720\nwas a terrific mentor and friend to me, Vernon Jordan.\n\n825\n00:39:00.720 --> 00:39:06.370\nAnd he said, if I give you any advice for what you're dealing with as a black\n\n826\n00:39:06.370 --> 00:39:07.160\nperson in\n\n827\n00:39:07.160 --> 00:39:10.360\ncorporate America, understand this.\n\n828\n00:39:10.360 --> 00:39:15.440\nWe stand on the shoulders of so many and our job is to lead our life that\n\n829\n00:39:15.440 --> 00:39:16.240\npeople will\n\n830\n00:39:16.240 --> 00:39:18.520\nwant to stand on our shoulders.\n\n831\n00:39:18.520 --> 00:39:25.610\nSo I think there is a responsibility to really exhibit the type of behavior\n\n832\n00:39:25.610 --> 00:39:26.840\nthat people will\n\n833\n00:39:26.840 --> 00:39:27.960\nwant to emulate.\n\n834\n00:39:27.960 --> 00:39:33.040\nI think it's important to be a mentor to people of color.\n\n835\n00:39:33.040 --> 00:39:36.850\nAnd I think as you know, I'm a mentor to a range of people, all types of people\n\n836\n00:39:36.850 --> 00:39:36.920\n.\n\n837\n00:39:36.920 --> 00:39:41.130\nBut I think it's incumbent upon me, it's not enough to say, I'm just going to\n\n838\n00:39:41.130 --> 00:39:41.720\ndo a great\n\n839\n00:39:41.720 --> 00:39:45.900\njob in business, but I don't really care or I can't be involved in anything\n\n840\n00:39:45.900 --> 00:39:46.600\nelse that\n\n841\n00:39:46.600 --> 00:39:47.880\nhappens in society.\n\n842\n00:39:47.880 --> 00:39:51.760\nI think that's a cop out because the reality is there only a few of me, if\n\n843\n00:39:51.760 --> 00:39:52.160\nthere were\n\n844\n00:39:52.160 --> 00:39:55.640\nseveral hundred, maybe a different story, but there are only a few.\n\n845\n00:39:55.640 --> 00:40:01.750\nAnd so I think I've got a responsibility to make a difference, not only in\n\n846\n00:40:01.750 --> 00:40:02.800\nbusiness,\n\n847\n00:40:02.800 --> 00:40:04.960\nbut to make a difference in our society.\n\n848\n00:40:04.960 --> 00:40:09.280\nSo one way you're definitely doing that, Ken, is your 110 initiative that you\n\n849\n00:40:09.280 --> 00:40:10.160\nco-founded.\n\n850\n00:40:10.160 --> 00:40:12.000\nCould you talk a little bit about that?\n\n851\n00:40:12.000 --> 00:40:13.000\nSure.\n\n852\n00:40:13.000 --> 00:40:16.000\nAnd I think this is, I think a good illustration.\n\n853\n00:40:16.000 --> 00:40:22.010\nSo two days after the George Floyd murder, Ken Frazier, the CEO of Merk and I,\n\n854\n00:40:22.010 --> 00:40:22.880\nand we've\n\n855\n00:40:22.880 --> 00:40:27.040\nknown each other since law school, we were talking about what could we do?\n\n856\n00:40:27.040 --> 00:40:31.120\nAnd their range of things is criminal justice reform set of issues.\n\n857\n00:40:31.120 --> 00:40:34.740\nWhat we said, where we could have an impact and the private sector could have\n\n858\n00:40:34.740 --> 00:40:35.280\nan impact\n\n859\n00:40:35.280 --> 00:40:43.690\nis in fact to be innovative, relative to creating jobs, family sustaining jobs\n\n860\n00:40:43.690 --> 00:40:45.360\nfor black Americans\n\n861\n00:40:45.360 --> 00:40:48.600\nand to have corporations work together.\n\n862\n00:40:48.600 --> 00:40:49.600\nSo here's the issue.\n\n863\n00:40:49.600 --> 00:40:53.720\nA number of companies really do want to hire more black Americans.\n\n864\n00:40:53.720 --> 00:40:58.820\nThe problem is they're employing the same tactics and strategies that haven't\n\n865\n00:40:58.820 --> 00:40:59.800\nworked.\n\n866\n00:40:59.800 --> 00:41:03.180\nAnd in their own businesses, they wouldn't continue to employ strategies that\n\n867\n00:41:03.180 --> 00:41:03.600\nwere not\n\n868\n00:41:03.600 --> 00:41:05.040\ngetting results.\n\n869\n00:41:05.040 --> 00:41:11.430\nSo part of what we're doing is we're developing an ecosystem of job suppliers,\n\n870\n00:41:11.430 --> 00:41:12.800\nfirms engaged\n\n871\n00:41:12.800 --> 00:41:16.000\nin workforce education, training, upskilling.\n\n872\n00:41:16.000 --> 00:41:18.120\nAnd then we're working with companies.\n\n873\n00:41:18.120 --> 00:41:22.580\nAnd so what's important here, back to doing something that we'll be enduring,\n\n874\n00:41:22.580 --> 00:41:23.640\nwe now have\n\n875\n00:41:23.640 --> 00:41:29.830\nover 42 companies, most of them Fortune 100 companies, who have signed up for a\n\n876\n00:41:29.830 --> 00:41:30.680\n10 year\n\n877\n00:41:30.680 --> 00:41:34.720\nfinancial commitment and a 10 year jobs commitment.\n\n878\n00:41:34.720 --> 00:41:41.850\nAnd the focus here is on black Americans who did not go to college or did not\n\n879\n00:41:41.850 --> 00:41:43.200\nfinish college.\n\n880\n00:41:43.200 --> 00:41:47.520\nBecause that's a segment that is really important to bring about a change.\n\n881\n00:41:47.520 --> 00:41:52.550\nAnd what's interesting is in corporate America, close to 70% of the family\n\n882\n00:41:52.550 --> 00:41:53.680\nsustaining jobs\n\n883\n00:41:53.680 --> 00:41:55.400\nrequire a college degree.\n\n884\n00:41:55.400 --> 00:41:59.240\nAnd the reality is based on analysis that has been done, a good percentage of\n\n885\n00:41:59.240 --> 00:41:59.600\nthose\n\n886\n00:41:59.600 --> 00:42:02.360\njobs really don't require a college degree.\n\n887\n00:42:02.360 --> 00:42:03.440\nSo here's what we're not doing.\n\n888\n00:42:03.440 --> 00:42:05.040\nWe're not compromising on the quality.\n\n889\n00:42:05.040 --> 00:42:07.560\nWe're not compromising on the standards.\n\n890\n00:42:07.560 --> 00:42:09.880\nBut we're saying we can change the specs.\n\n891\n00:42:09.880 --> 00:42:13.600\nWe can in fact change our approach and we can get traction.\n\n892\n00:42:13.600 --> 00:42:18.040\nAnd some companies have actually started on their own way before this to do it.\n\n893\n00:42:18.040 --> 00:42:23.420\nBut now what we're having is this aligned commitment, a sharing of best\n\n894\n00:42:23.420 --> 00:42:24.480\npractices, a\n\n895\n00:42:24.480 --> 00:42:27.720\nset of innovative tactics and strategies.\n\n896\n00:42:27.720 --> 00:42:31.280\nAnd our goal is to have a million jobs.\n\n897\n00:42:31.280 --> 00:42:36.280\nAnd I think if this works, my view is three or four years from now, we're going\n\n898\n00:42:36.280 --> 00:42:36.720\nto be\n\n899\n00:42:36.720 --> 00:42:39.040\nable to up that target.\n\n900\n00:42:39.040 --> 00:42:43.160\nAnd what will also happen, David, because we're having this focus is as a\n\n901\n00:42:43.160 --> 00:42:43.800\nresult of\n\n902\n00:42:43.800 --> 00:42:46.840\nrespecting jobs, it's going to help everybody.\n\n903\n00:42:46.840 --> 00:42:51.920\nSo this is not an either or situation.\n\n904\n00:42:51.920 --> 00:42:57.110\nAnd I think with a lot of the strategies, you can in fact solve the issues and\n\n905\n00:42:57.110 --> 00:42:57.840\nproblems\n\n906\n00:42:57.840 --> 00:43:01.840\nof a particular group, but you can do it in a way that also benefits a very\n\n907\n00:43:01.840 --> 00:43:02.800\nbroad group.\n\n908\n00:43:02.800 --> 00:43:03.800\nThat is just great.\n\n909\n00:43:03.800 --> 00:43:06.560\nYou know, Ken, this has been so much fun.\n\n910\n00:43:06.560 --> 00:43:10.430\nAnd I want to have some war before we wrap this up with the lightning round of\n\n911\n00:43:10.430 --> 00:43:10.840\nQ and A\n\n912\n00:43:10.840 --> 00:43:11.840\nhere.\n\n913\n00:43:11.840 --> 00:43:13.000\nSo are you ready to go here?\n\n914\n00:43:13.000 --> 00:43:14.000\nYeah.\n\n915\n00:43:14.000 --> 00:43:15.000\nAll right.\n\n916\n00:43:15.000 --> 00:43:16.760\nThree words of best to strive you.\n\n917\n00:43:16.760 --> 00:43:18.360\nBoy, three words is quite good.\n\n918\n00:43:18.360 --> 00:43:23.480\nI still do define reality, give hope for that's there you go.\n\n919\n00:43:23.480 --> 00:43:24.480\nOkay.\n\n920\n00:43:24.480 --> 00:43:25.480\nOkay.\n\n921\n00:43:25.480 --> 00:43:29.720\nIf you could be one person for a day beside yourself, who would it be?\n\n922\n00:43:29.720 --> 00:43:32.200\nNelson Mandela.\n\n923\n00:43:32.200 --> 00:43:34.200\nWhat's your biggest pet peeve?\n\n924\n00:43:34.200 --> 00:43:38.760\nBut, you know, Dave, I don't really have a pet peeve.\n\n925\n00:43:38.760 --> 00:43:43.520\nIf anything, I just want to get to where I want to go fast.\n\n926\n00:43:43.520 --> 00:43:46.760\nAnd so I don't like things that slow me down.\n\n927\n00:43:46.760 --> 00:43:50.760\nWhat's something about you that few people would know?\n\n928\n00:43:50.760 --> 00:43:52.520\nI used to be a pretty good singer.\n\n929\n00:43:52.520 --> 00:43:56.040\nBiggest learning serving on the Berkshire Hathaway board watching Warren\n\n930\n00:43:56.040 --> 00:43:57.880\nBuffett in action.\n\n931\n00:43:57.880 --> 00:44:07.230\nThis learning for me is the amount of time he spends on people and the amount\n\n932\n00:44:07.230 --> 00:44:08.240\nof time\n\n933\n00:44:08.240 --> 00:44:14.990\nhe spends on making sure you have a context for decisions that are going to\n\n934\n00:44:14.990 --> 00:44:15.960\ncome down\n\n935\n00:44:15.960 --> 00:44:19.480\nliterally not just in the next year, but in the next five or 10 years.\n\n936\n00:44:19.480 --> 00:44:20.480\nAll right.\n\n937\n00:44:20.480 --> 00:44:22.040\nTwo more questions.\n\n938\n00:44:22.040 --> 00:44:25.200\nWhat three bits of advice would you give aspiring leaders?\n\n939\n00:44:25.200 --> 00:44:32.420\nMy words of advice would be integrity is absolutely core and define what\n\n940\n00:44:32.420 --> 00:44:33.520\nwinning is\n\n941\n00:44:33.520 --> 00:44:35.760\nand then make it happen.\n\n942\n00:44:35.760 --> 00:44:37.360\nAnd you mentioned it earlier.\n\n943\n00:44:37.360 --> 00:44:40.880\nKathy, he's been a wonderful partner in your life and you have a fabulous\n\n944\n00:44:40.880 --> 00:44:42.240\nfamily and here\n\n945\n00:44:42.240 --> 00:44:43.240\nyou are.\n\n946\n00:44:43.240 --> 00:44:44.440\nYou have not retired.\n\n947\n00:44:44.440 --> 00:44:45.440\nYou are.\n\n948\n00:44:45.440 --> 00:44:46.440\nYou have re-fired.\n\n949\n00:44:46.440 --> 00:44:48.840\nYou're going out at 24/7 now.\n\n950\n00:44:48.840 --> 00:44:50.600\nHow do you balance it all again?\n\n951\n00:44:50.600 --> 00:44:56.090\nSo what I would say, David, is you really have to be clear about what your\n\n952\n00:44:56.090 --> 00:44:57.440\nvalues are.\n\n953\n00:44:57.440 --> 00:45:03.490\nAnd for me, which has been a learning over time is it's always been family and\n\n954\n00:45:03.490 --> 00:45:04.240\nfriends\n\n955\n00:45:04.240 --> 00:45:06.480\nare most important.\n\n956\n00:45:06.480 --> 00:45:10.160\nBut for me, I've got to be fulfilled.\n\n957\n00:45:10.160 --> 00:45:14.640\nAnd I got to do things that whether it's business or in life that are helping\n\n958\n00:45:14.640 --> 00:45:15.400\npeople.\n\n959\n00:45:15.400 --> 00:45:16.400\nThat's what motivates me.\n\n960\n00:45:16.400 --> 00:45:17.560\nThat's what I get excited about.\n\n961\n00:45:17.560 --> 00:45:20.800\nI love to win and that gives me great satisfaction.\n\n962\n00:45:20.800 --> 00:45:25.870\nBut what gives me unbelievable satisfaction is when I believe I really had an\n\n963\n00:45:25.870 --> 00:45:26.560\nimpact on\n\n964\n00:45:26.560 --> 00:45:28.600\npeople and I've helped them.\n\n965\n00:45:28.600 --> 00:45:33.540\nKen, I want to thank you on behalf of so many people in our country for the\n\n966\n00:45:33.540 --> 00:45:34.400\ndifference\n\n967\n00:45:34.400 --> 00:45:36.400\nthat you are making.\n\n968\n00:45:36.400 --> 00:45:41.330\nFor taking on this one-ten initiative and for just being the example that you\n\n969\n00:45:41.330 --> 00:45:42.040\nset, pushing\n\n970\n00:45:42.040 --> 00:45:46.880\nfor social responsibility, all of this is making our world a better place.\n\n971\n00:45:46.880 --> 00:45:50.250\nSo I hope you feel fulfilled because you're definitely making a great\n\n972\n00:45:50.250 --> 00:45:51.120\ndifference.\n\n973\n00:45:51.120 --> 00:45:53.600\nAnd thank you so much for being on this show.\n\n974\n00:45:53.600 --> 00:45:55.280\nWell, thank you so much, David.\n\n975\n00:45:55.280 --> 00:45:59.930\nAnd I know this is your podcast, but what I would say, and I've said this to a\n\n976\n00:45:59.930 --> 00:46:00.320\nnumber\n\n977\n00:46:00.320 --> 00:46:05.900\nof people, what was very clear to me in my first meeting with you is you're a\n\n978\n00:46:05.900 --> 00:46:06.520\nperson\n\n979\n00:46:06.520 --> 00:46:10.040\nwho's driven by values and you care about people.\n\n980\n00:46:10.040 --> 00:46:11.040\nSo thank you.\n\n981\n00:46:11.040 --> 00:46:12.040\nYeah.\n\n982\n00:46:12.040 --> 00:46:12.040\nThank you.\n\n983\n00:46:12.040 --> 00:46:23.780\nI want to give you a great example of constructive conversation that happened\n\n984\n00:46:23.780 --> 00:46:24.960\nto be.\n\n985\n00:46:24.960 --> 00:46:28.640\nYou know, I always like to see myself as the king of recognition.\n\n986\n00:46:28.640 --> 00:46:30.800\nI love giving away recognition awards.\n\n987\n00:46:30.800 --> 00:46:33.950\nI loved being out there with the people and telling them they were doing a\n\n988\n00:46:33.950 --> 00:46:34.560\ngreat job when\n\n989\n00:46:34.560 --> 00:46:35.560\nI saw it.\n\n990\n00:46:35.560 --> 00:46:38.880\nBut one time I'm in my office and I'm with my finance people.\n\n991\n00:46:38.880 --> 00:46:40.920\nWe're getting ready for an investment conference.\n\n992\n00:46:40.920 --> 00:46:44.680\nSo we're really grinding on making this presentation really good.\n\n993\n00:46:44.680 --> 00:46:48.000\nAnd outside the hallway, I hear this roving recognition band.\n\n994\n00:46:48.000 --> 00:46:51.720\nThis was a band that was created at young brands by a group of people who were\n\n995\n00:46:51.720 --> 00:46:52.400\npassionate\n\n996\n00:46:52.400 --> 00:46:55.660\nabout recognition and they go around in the halls and they find four or five\n\n997\n00:46:55.660 --> 00:46:56.280\npeople each\n\n998\n00:46:56.280 --> 00:47:00.160\nmonth that really needed to get recognition and deserved it.\n\n999\n00:47:00.160 --> 00:47:04.320\nAnd everybody would come out in the hallway and join them and recognize them\n\n1000\n00:47:04.320 --> 00:47:04.840\nand make\n\n1001\n00:47:04.840 --> 00:47:06.120\nit special.\n\n1002\n00:47:06.120 --> 00:47:09.960\nSo the CFO says to me, we got to go out there and join them.\n\n1003\n00:47:09.960 --> 00:47:11.640\nI said, no, we got to get this done.\n\n1004\n00:47:11.640 --> 00:47:15.840\nAnd he says, no, you got to go out there because you are the king of\n\n1005\n00:47:15.840 --> 00:47:16.920\nrecognition of\n\n1006\n00:47:16.920 --> 00:47:17.920\nthis company.\n\n1007\n00:47:17.920 --> 00:47:20.520\nIf you don't go out there, you're going to be saying to people that this really\n\n1008\n00:47:20.520 --> 00:47:20.760\nisn't\n\n1009\n00:47:20.760 --> 00:47:22.400\nthat important to you.\n\n1010\n00:47:22.400 --> 00:47:23.520\nAnd you know what?\n\n1011\n00:47:23.520 --> 00:47:24.520\nHe was so right.\n\n1012\n00:47:24.520 --> 00:47:28.530\nHe was willing to engage in constructive confrontation and gave me the right\n\n1013\n00:47:28.530 --> 00:47:29.280\nsolution,\n\n1014\n00:47:29.280 --> 00:47:33.200\nwhich was to get my butt out there in the hallway and be happy whether I wanted\n\n1015\n00:47:33.200 --> 00:47:33.520\nto be\n\n1016\n00:47:33.520 --> 00:47:36.520\nhappy or not and join in in that recognition.\n\n1017\n00:47:36.520 --> 00:47:37.520\nAnd I did it.\n\n1018\n00:47:37.520 --> 00:47:39.520\nAnd I am so glad I did.\n\n1019\n00:47:39.520 --> 00:47:43.880\nSo clearly I have been the beneficiary of constructive confrontation.\n\n1020\n00:47:43.880 --> 00:47:46.640\nSo this week, I want you to try it.\n\n1021\n00:47:46.640 --> 00:47:48.400\nGive someone direct feedback.\n\n1022\n00:47:48.400 --> 00:47:51.160\nI want you to do what you learned from Ken Chanal.\n\n1023\n00:47:51.160 --> 00:47:55.840\nI want you to engage in constructive confrontation, lock arms with whoever you\n\n1024\n00:47:55.840 --> 00:47:57.000\n're working with,\n\n1025\n00:47:57.000 --> 00:47:59.760\nand let them know that you're on their side.\n\n1026\n00:47:59.760 --> 00:48:01.800\nSo do you want to know how leaders lead?\n\n1027\n00:48:01.800 --> 00:48:04.990\nWhat we learned today is that the great leaders know how to engage in\n\n1028\n00:48:04.990 --> 00:48:07.520\nconstructive confrontation.\n\n1029\n00:48:07.520 --> 00:48:11.910\nThanks again for tuning in to another episode of How Leaders Lead, where every\n\n1030\n00:48:11.910 --> 00:48:12.240\nThursday\n\n1031\n00:48:12.240 --> 00:48:16.800\nyou get to listen in while I interview some of the best leaders in the world.\n\n1032\n00:48:16.800 --> 00:48:20.820\nI make it a point to give you something simple on each episode that you can\n\n1033\n00:48:20.820 --> 00:48:21.640\napply to your\n\n1034\n00:48:21.640 --> 00:48:26.080\nbusiness so that you will become the best leader you can be.\n\n1035\n00:48:26.080 --> 00:48:26.920\nSee you next week.\n\n1036\n00:48:26.920 --> 00:48:36.920\n[BLANK_AUDIO]\n\n1037\n00:48:36.920 --> 00:48:46.920\n[BLANK_AUDIO]","

David Novak 0:03

Welcome to How leaders lead where every week you get to listen in while I interview some of the best leaders in the world, I break down the key learning so that by the end of the episode, you'll have something simple that you can apply as you develop into a better leader. That's what this podcast is all about. Today's guest is Ken tional, the former chairman and CEO of American Express, and the current chairman, and a managing director at General catalyst, a dynamic private equity firm. Now, if you run a business or lead a team, you know, there are moments when you need to lean into confrontation. And I don't mean dance around the confrontation, I'm talking about facing that head on. For a lot of people, this can be really hard to do, really intimidating. But the great leaders I know have learned to engage in constructive confrontation. Let me tell you something, if I was working for Ken, and I was going to have a one on one conversation with him, I know that I would know exactly where he's coming from. He's going to listen to me, and he'd know what I was thinking. But make no mistake, I'm going to know how he feels, what his concerns are, and what areas me and my team need to work on. And here's what I think makes Ken's approach so effective. After giving you specific feedback, he'll give you input to help you put a game plan together so that you and your team can move forward and take the appropriate action. He just doesn't walk in your office and then leave the problem with you. He helps you work through the problem. He wants you to be successful. And he knows that his job is to add value through his experience and his expertise. That ability to not only engage in confrontation, head on, address the issues that you need to develop either personally or on your team. Well, he does that in a positive and respectful way that sets others up for success. That is a unique skill set. And it's one of the many things we can learn from kin in this conversation. By the end of this week's episode, I know that you will be more prepared to engage in constructive confrontation. I'm excited for you to listen in and learn along with me. So here's my conversation with my good friend, and soon to be yours. Ken Schulte.

Ken, thanks so much for taking the time to have this conversation. Great to be here, David. You know, Ken, I had a blast having dinner with you. And Jim Robinson, another former chairman of American Express. And I learned that even though you retired from American Express, you have clearly refired your career at General catalyst, what led you to go down this path? For me,

Ken Chenault 2:48

David, I've always tried to be involved in things that I think are gonna be transforming for me. And to put me in areas where I really have to learn, I would not have planned out five years before I stepped down that I was going to go into venture capital. But two of the founders of general catalyst, David Falco, and Joel Cutler, and a third partner, Hamas, Tunisia, five years before I stepped down, said, you're someone that we think really could work well, with founders, you clearly love technology. And I've gotten to know them, I knew them for close to 20 years now. And what was exciting to me, is, I think technology is at the forefront. I really liked the idea of being involved with companies right at the start through different cycles. And so what I always felt at American Express, I really focused on this notion that you've got to become the company that will put you out of business. So reinvention is important to me, for our company. And reinvention is important for a leader, as long as you have some real core values. You know, I

David Novak 4:09

always loved that I remember you talking at the ACSC, which was a CEO forum that we were at where you did talk about, you have to be the company that puts yourself out of business, because there's a lot of people out there, they're attacking you. I'd like to ask you, you know, I like to really get inside of the heads of how leaders think, what insights have you gleaned on how to evaluate the startups that you invest in?

Ken Chenault 4:29

They've been one of the things that is really important, and actually I've followed some advice that Warren Buffett gave me and he's also been very public, in general and giving this advice is two of the most important things you can do. Is one judge the character of the leader or the CEO or the founder. What are they? What are their values? What do they stand for? Because, particularly in early stage, you're making a bet Add on the person. The second thing that's very important for me is, do they really want to build a company that will endure? And how do they think about the marketplace? Because part of what you're looking at is, does this founder have a real concept of what they want to achieve? Why are they introducing these products and services? Do they want to build a company that's really going to endure? Or is it just to make a quick buck, and do something for three or four years and then sell it? We're not interested in that type of company, or person, not going to make a value judgment. But that's not the type of business and person that I want to be involved with. So I think what's absolutely important is an assessment of the character of the founder. And then do they have the grit? Do they have the resilience? Do they have a vision for what they want to accomplish? And then very importantly, for example, do they understand the details of their business? Because in the beginning, throughout, I really believe you've got to understand the high level strategy, but you have to, in fact, understand the key details?

David Novak 6:21

You don't can I know you're very focused on making a difference in the world. And I read your article in Barron's recently, where you talked about responsible innovation for tech companies. What does that mean to you responsible innovation? And you know, why did you write the article,

Ken Chenault 6:37

I fundamentally believed that you want to build companies that will endure, and you want to build companies that, in fact, are going to make the world better, both for their people, and the world at large. And one of the things that I felt very strongly about, and my partner, Haman, Tunisia, who was the co author with me, is that the era of move fast and break things is over. You can't have a situation where someone says, I'm going to come out with a product or service with no idea, or in fact, regard for the consequences of that product or service. And what we're also saying is, with the advancements in AI, machine learning, you actually should be able to better determine and at least hypothesize, what will be the impacts of what I'm doing. So if in fact, you're a manufacturing company, in the beginning, understand what some of the environmental impacts are going to be, if in fact, you're offering products or services, understand what the impacts of those products and services will be on different groups. If in fact, you want to have a company that embraces diversity and inclusion, how are you doing that right from the beginning. And so the key thing for me, David, is, we live in a world today, where you've got to have a better understanding of the impacts of your products and services on the world at large. And, very importantly, I think it will help you be very commercially successful, and also to build a company that will endure because we all need a well functioning society to have a well functioning economy.

David Novak 8:33

Where do you think Tech has gone wrong?

Ken Chenault 8:36

If we look at the whole issue of information, technology and privacy, we look at some of the biases in artificial intelligence. I don't think anyone comes out with a company or a business and say I want to hurt people. But what I think technology has done to an extent, and we've seen this in the whole area of information management is they're saying let the government deal with that. Our job is just to come out with products and services. And one of the things that I've done actually with a mutual friend of ours, Sam Palmisano, is we formed a group called the data consortium to create a set of standards for how we use data, how we use information. So there is now a responsibility that has to be at the forefront.

David Novak 9:25

You know, when we were talking about you working with the founders of these startups, I'm a you absolutely lit up again. I mean, it was fun to see, you know, you were really excited about it. And I know you do a lot of coaching. What's a one on one coaching session, like with Ken Chenault.

Ken Chenault 9:40

It really varies, obviously, based on the individual, but one of the things that I talked to founders about very directly is eliciting and receiving direct feedback. And so this concept that I used in management of cutting destructive confrontation, do it respectfully. But at the end of the day, what you want with your people, and what you're gonna get with me is I'm going to tell you how I feel, what my concerns are, what areas you need to develop, let's talk about it. But then let's put a game plan together. Because one of the things, it's important that I really stress to founders or anyone that I'm mentoring is, we're all judged by our actions. And so take me through the outcomes, behaviors that you engage in, let's understand what the impacts are. Let's understand what the results are. Because we all got to be outcome driven. But again, if we want to do something that's really lasting and meaningful, it's got to be motivated by values and principles.

David Novak 10:44

Absolutely. And it's clear, you're having a lot of fun doing this, and I want to take you back now can tell us about your upbringing.

Ken Chenault 10:52

It's interesting, Dave, you know, growing up, really in 50s 60s 70s. You know, I grew up very fortunate, I had parents who were really inculcated in us a work ethic, but a strong sense of values. And the reality is growing up. At that time, as an African American, in the midst of the Civil Rights Movement. I mean, one of the things that I have said to people is, I was born literally three years before Brown v Board of Education, which struck down separate but equal, my life would have been very different. And so I feel I've had a incredible life that I could see change, and I could help bring about change. But growing up, I love sports, I had a dream, I wanted to be a professional basketball player, I thought I was pretty good in baseball. And I was literally almost the same height, I am now in eighth grade. And one of the people that I played basketball with who still is remained a good friend was Dr. J. Is that right? Yeah. And so what I realized is Jay grew a lot more than I did. So I had to reevaluate my circumstances and became a point guard. But you know, academically, my first eight years, I was an indifferent student, I tested well, but I didn't really apply myself, it drove my parents crazy. And then, really over the summer, between eighth and ninth grade, I don't know what happened. But just a level of maturity came to me. And I also at that time, I didn't really have a concept of what it would be to be a business leader, I just didn't know a lot about business, I didn't have a lot of interest in business. So I actually thought I was going to be a civil rights lawyer, my parents, I think, did a terrific job making me aware of the challenges as a black person in the United States, but also that I should have high aspirations. I'll just tell you one story. When my parents were looking for a school, the public school, they found was shifting black kids into only vocational programs. My father didn't like that. And so he found a private school. And the headmaster said, Well, why do you want your child to go here, and he went through why and my mother said, I want my children to feel that if they want to be president of the United States that they could do that. Now you can imagine this, this was in 1956. That was crazy. But that just gives you a sense of the optimism, and I think that really has helped me in life is despite the obstacles, figure out a way around that. And be optimistic that you can bring about change, you know, you did end

David Novak 13:37

up with American Express, you know, what were the big decisions that took you there?

Ken Chenault 13:41

Yeah. So I've not been the person and I respect people who can do it, who write this sort of 25 year game plan, here's where I want to be, here's what I want to do. My view is I just fall in love with things. They're trends, they're opportunities that really motivate me. So I'm less the person who had this 25 year career plan, God bless people who could do that, I would have been too careful. And so I was at Bain and Company, I was actually enjoying myself. They're actually one of the people I worked with a lot was Mitt Romney, which I really enjoyed. And a headhunter talked to me about an opportunity at American Express. And what was interesting is, the opportunity was that American Express had invested in cable, Warner Cable. And so to date me, I saw a cable as really an incredible technology with a lot of possibilities. And so, Lou Gerstner, at that time, was head of the largest division at American Express, and also head of strategic planning. And they were looking for sort of a mid level person. And I came down and talked to a number of people in lieu also and said, let me make the leap. And I remember going home, talking to Kathy who you know, and saying, you know, I think I'm Gonna go to American Express. And Kathy is, is diligent, she said, but they're a payments company. They're a travel company. And you're going there for cable. And I said, Well, let me explain what I'm trying to do here. So she fortunately agreed, and she was in our last year law school. And it was a terrific experience. And then David, what was critical to my career, and I would say this to people, and certainly young people in a career. So I was in strategic planning for two and a half years, I was doing some really interesting assignments. But I was really impatient. And I wanted the next opportunity. And I was offered a promotion in the card business. And at that time, I don't know if they're innovative enough, which you're talking about a pretty innovative group. And so I was concerned that I wasn't moving fast enough in the company. And I got this opportunity to work in a business called merchandise sales, which sold merchandise to the male electronics, stereo systems, for coats, jewelry, it was unbelievable. And it was a business that had like 100 100 and 50 million in sales was losing money. And I go there, and Lou said, Can do not go there. This is a dog business. I'm thinking of closing this business down, I wouldn't do it. And I said, Lou, I think this business is exciting, because it has a direct marketing platform. I just learned what direct marketing was. And it sold all this merchandise through the mail. So you think about a precursor to Amazon that was there. And so that was a turning point for me. Because in three years, we got up to over 600 million in sales, it became very profitable. We became one of the top 10 direct mail merchandisers in the world. And then I tried to buy the company from American Express. I got it through every level. And then Lou Gerstner said, No. And I was furious, furious. I quit for a day. And Lou said, appropriately, you're a spoiled brat. You've got an opportunity here, come back in here. And I did.

David Novak 17:16

Well, so that was really a pivotal moment in your career where you took something that nobody else would want and turn it into something that you wanted to buy. That's fantastic. You know, can you rose to the ranks of American Express based on that and other things that you did? You became the third African American in the history of fortune 500 companies to become a CEO? Did you have any insecurities as a black man in an overwhelmingly white industry? And how did you overcome it? You know,

Ken Chenault 17:44

what's interesting here, and I think is important is that I clearly felt some prejudice at the company. But what I would also say is, there were a number of people who really were instrumental in helping me and as you know, having been a CEO, there's not room for 100 people at the top. And so my first 10 years with the company, I wasn't thinking about being CEO at all, I was thinking about learning a set of skills and capabilities, and then maybe start my own business. And only after around 10 years, a number of people said to me, you've got the potential that you can go to the top. So there were people obviously, like Lou Gerstner, Harvey Gallup, Jim Robinson, all different personalities. But were really interested in my development, and really helped me succeed. And I would say the other thing that I really believe, particularly in the fractious times we're in, I was able to gain the commitment and the loyalty of my colleagues across the board at American Express. So building a trusted relationship, and demonstrating to people that yeah, you have high standards, performance is critical, but you care about them. And so 50% of the people probably had very different political views than I did. But what we did was we found common ground, and the mission and objectives of the company, really were important. So what I would say is, I felt more of an impact externally than I did internally. Now internally, I did have some people say to me, boy, the best you can do is to be a division president, there was no way that American Express would ever have a black person as CEO of a company. And frankly, what I did in that situation is I just ignored him. I just said, Screw him. I'm gonna do the best I can do and I think I'm gonna have an opportunity.

David Novak 19:55

You know, you think about the black people that are coming up in business today. What could you You tell someone that is not of color in terms of how to help people rise? And what do you tell people who are of color? How they should really grow within the organization? Yeah, I

Ken Chenault 20:10

think that's a great question, David, you know, one of the things that I think is, is important, and this goes to really deciding what you want in your culture and what you need. What was terrific about American Express is, we're in the service business, and you got to be focused on people. And so part of the culture is how do we embrace people. And so to embrace people, what I would say to our white colleagues is talk to your black employees, as a group, and on an individual basis, try to understand some of the issues that they're facing. Get in dialogue, don't be afraid to talk about race issues, I mean, racism, America's greatest unsolved problem. So talk about it, ask people how they feel. Second, what I would say very importantly, is you got to focus on bringing about change. So what's the representation at your company? Who are some of the people that you're mentoring. And as you know, David, given the number of people that you've mentored, the reality is picking a few people. So one of the things I talk about is in leadership, and diversity is the handful theory. There are a handful of people in any company that can rise to the top, make sure you got some black and brown people in that handful, that you're nurturing that you're building that you're taking through, as well as looking at overall representation goals. Because getting leaders in the right place does make a big difference. The other thing that I think is very important in a company is don't tolerate behavior that marginalizes people. And so if in a private moment, you hear something that you know, is not appropriate. From a racial gender standpoint, ask yourself, What are you saying to the person? Look, that's out of line? Why did you say that? What are the issues, because that's important in the culture that you're trying to create. So it's not just what you do publicly. But what you do privately, that I think is important for black employees, I'll tell you what I say to them. At the end of the day, I give them a line that my father would say to me, Look, there are a lot of problems in this world, there are a lot of things and you should do everything you can overcome them. But can the one thing you can control is your performance, you know, when you're at your best number one, number two is where you see issues in the company, advocate, because at the end of the day, if you don't, you're allowing an environment to persist. Third is ensure that real focus and lasting focus is given to diversity throughout the company. But also, one of the things that I did, for example, when we first formed our black employee network, I put a white guy in charge of it. Because I said, you know, why is it that the black guy is the one who's got to solve the racial problem? It's both of us have to deal with it. And so yeah, you're going to be head of the black affinity network for a period of time. Some of the black employees said to me, can help you to do this. I said, because this is a shared accountability here. This is what we have to do, you know, because I think part of what we all have to do in our life and in business, is we got to put ourselves in the other person's shoes. We got to understand what it really feels like. And I think if we do those things, we're going to be better off as a society. You talked earlier

David Novak 23:37

about the importance of productive, positive confrontation. Did you ever get some coaching from someone that surprised you? And how did you handle it?

Ken Chenault 23:49

Yeah. So David, you know, at the end of the day, there's nothing like feedback. All right. So in my mid 30s, and I thought I was a hard charging guy, I thought I was a good guy. I thought I treated people respectfully. But I was very driven from a performance standpoint. So we had this upward feedback. And it's, you know, there's always 10 things you do well, five to 10 things you can improve. But the most glaring thing for me was, the feedback was Ken, you are not a good listener. I said, Give me a break. I'm not a good listener. I mean, I'm nice to people. They said no, here's what we feel. If you don't feel someone is saying something that is really impactful. you zone out. In fact, we have a term for it, the kin zone, and you just like ignore, and so, you know, at the end of the day, they've what they were saying is, you're disrespecting me, and you only give us like two minutes. If we don't say something that really is on your agenda or you think is really bright. You're out. I was devastated, devastated. because it was there was no gray area, it was clear. So, you know, I go through my performance plan, I do this stuff, you know, after three months I go back, alright, let's see, um, no, there's gonna be a big improvement. And one of the things was the harsh reality is, you know, it is really hard to change perceptions. So it took around two years. And then literally five years later, I remember someone saying, you know, Ken, one of the things that's really remarkable about you is you're a good listener. And I just said, Let me tell you the story. And so what I really believe, David is that all of us have areas that we need to work on. And, and one of the things that I saw was, being an active listener, was critical, I was actually losing out on ideas, even though I wasn't abrasive. I was belittling people, I was saying, if you don't show me, you're really bright. And you've got a great idea in two minutes, I'm going to zone out. And so that was one of the most important interventions. And I realized how serious it was going to be, to my success as a leader,

David Novak 26:09

you mentioned on the number of people that really helped you in your career took an interest in you, but it sounds like you're a really good self coach. Sounds like you, you're constantly evaluating yourself and trying to take your performance to the next level. Is that fair to say?

Ken Chenault 26:23

Yeah, I, you know, I think some of it may come from sports, I was a really intense athlete, and really, from a pretty young age, sort of would analyze after a baseball game or a basket, what did I do, right? What I do wrong, and I've just sort of developed the habit of constantly reassessing and areas that I need to work on and, and improve and learn. And I think status quo is the enemy in business. And I think it's the enemy in life. If you say, I got it all, I just don't think you're a learning person.

David Novak 26:57

But when it comes to business kid, you didn't deal with the status quo very often, right? After you became CEO, if I recall, you had 911. And then in 2008, you had the financial crisis, you know, I was on the board of JPMorgan Chase. And I mean, everybody was like, going crazy. At that point in time, either. You had to lead through those two tough times and other tough times, what's your biggest learnings on how to handle adversity?

Ken Chenault 27:25

My leadership mantra, David, and I literally think about this every day is the role of a leader is to define reality and give hope. And so in a crisis, what is really important, and it's difficult in normal times, but particularly in a crisis, is how do you define reality? How do you focus on some of the short term issues that can get you through the crisis, but do it in the context of a long term strategy? And that's really important to me, I think it's really critical in a crisis is to articulate the principles that you're going to use to prioritize. And so in the financial crisis, I had three principles stay liquid, that was really critical. And I explained that to the organization, every level of the organization, what did it mean to stay liquid, stay profitable. And that was both reality and hope that I thought we could do it. But here is why it's important for us. And third, even in the financial crisis, selectively invest in growth. So those are competing tensions. And people would say to me, well, Ken, you're cutting costs. But you're saying we should invest in growth. And I said, That's right, we've got to prioritize. But it is not going to be we're not going to invest in growth. And we're just going to cut costs, we got to do both. But those principles were helpful to frame for the organization. How are we doing? What are some of the markers of progress on a weekly or a monthly basis? Some of its qualitative, some of its quantitative. But I think what is also important and fundamental in a crisis, is people have to trust you, because you're going to make decisions and you're going to take actions, even though you try to give as much context as you can, that people will say, Ken, Dave, I don't know if this is going to work. But then at the end of the day, will they trust you. And part of what you have to do in a crisis is you have to be decisive, very decisive. And you have to be compassionate. You know,

David Novak 29:32

you mentioned that you had to cut costs. And I remember you talking to me once. I don't know if you remember this, but he talked about the tough challenge of restructuring and reducing headcount and how do you balance that compassion and being decisive? Could you had to do that after 911? You had to do that after the financial crisis?

Ken Chenault 29:52

Yeah, I think 911 is probably a good illustration. You know, we lost 11 of our colleagues that perished in the north Power of the World Trade Center. And our business was in freefall. We thought particularly also with the acceleration of the digital transformation, travel was changing. So we decided we had to cut close to 15% of our workforce. And there were a number of people in my organization that had legitimate concerns and said, Ken, the organization is in a really tough emotional state, you shouldn't take this action. And I said, The problem is, if we don't act, I think we're going to put the company in a very bad position. And I said, we need to act now. So literally, a month and a half after 911, we announce these cuts. And what I tried to do there, David was explained to the organization, that it was not their fault here, the market realities here, the competitive realities. And I think at the end of the day, there was no easy way of doing it. But ultimately, people need to believe that these were painful actions that you were taking, and you understood what the pain was. And one of the things that we still do is we have an employee survey, that actually counts part of it in our incentive compensation. And people said to me, don't do the employee survey this year, because you're doing these layoffs. And I said, No, we're going to do the employee survey, we got to be accountable. And the reality is we ended up getting a little bit higher scores. Now, I think some of that was due to the environment, and people understood the situation. But I would say, David, I haven't found the easy way of doing it. But what I firmly believe, is you got to act, you got to act decisively, don't procrastinate. And then tell people, This is really painful, but why you had to do it.

David Novak 31:54

You know, I think that whole notion of having people understand that you understand the pain, even though you can never feel what they feel is so key. You know, speaking of making tough calls, you talked about the decision you made on whether or not to do a deal with Costco just before you left as CEO. Would you mind talking about that?

Ken Chenault 32:14

Sure. And let me say at the end of the day, Costco is a great company, they're doing really well. But we came up with a concept. And I was very involved in developing that concept with Costco in the 90s. to issue a co branded American Express card. And what you got to remember is, that type of product was a real innovation at that time, and Costco and had a relationship with Discover before. And we created a very integrated product portfolio for Costco. And it was terrifically successful, and the contract was renewed two or three times. Then in the mid 2000s, the contract was elapsing Costco decided to put it out for bid, we certainly bid for the deal, we wanted the deal. But I also back to the final reality. I told the board, we may not get this. And here's the limits for me. I want to make sure that we're not going to do a deal that will damage our economics for the long term. I'm going to be aggressive. But I also believe that we have the strength in our franchise that if we did not move forward, we could still be successful. So I want to be clear, my preference would have been to do the deal. Costco decided that they wanted to set up economics that I did not think was the right thing for us. And the tough thing. Dave here is unlike 911, and the financial crisis, where we performed well, but we were with a group of people that had gone through some of the same experiences in Costco. We were out there alone. And so people were saying, Boy, American Express is really doing well Ken's been really doing well. Has he lost his mojo, he should have resigned. And the reality is, we could have done the deal. And my successor, Steve squarey, has done a terrific job. Steve would have been saddled with that. And in fact, the impact wouldn't have been felt for even a few years after Steve took over. And I just felt that wasn't in the right interest of the company. But I went through a period of around 18 months of people really questioning the strategy but they're what we did. We set out clear objectives and fortunately we were able to achieve it. But it wasn't fun.

David Novak 34:43

You're like the Wall Street darling and everything you touched turned to gold. Now you have this Costco account, you know, you lose that account. That's definitely going to hurt your bottom line for a couple of years. The stocks depressed now you're not as smart can you know how did you deal with that?

Ken Chenault 34:59

Yeah, So what I did is one, David, what was important, I really was convinced I was right. But one of the things I say to people is just because you're right, doesn't mean you feel terrific. And so what I did both for the organization and investors is I gave the rationale, we then set up what are some targets that we could achieve. And as I said, it took us close to 18 months to get where we needed to, but we got there ahead of schedule. And what is very, very clear now and I still get some investors that will say to me, boy, that was a really smart call. And I wanted to say, Boy, let me go back and read what you really said, I don't remember you saying it was a smart call. And so I think, David, you've been through this, you've done this, you've got to have the courage of your convictions. But you also have to be clear that you're going to be alone. And at the end of the day, fortunately, it worked out. You know, I could have been wrong, but fortunately, I wasn't. But I think the more important lesson for me. And I would say from a leadership standpoint, we all are faced with choices, that no one would have known that I made a short term decision with Costco if we'd move forward. But that wouldn't have been the right thing to do. And I think you and a number of CEOs, faced with those same facts would have made that same decision. But what we also would understand, you certainly wouldn't get the accolades. If you want the accolades, forget it, it's not going to happen. It'll be after the fact.

David Novak 36:43

You know, we're gone through this process of going through COVID, which has been so hard on our country in the world, what have you learned about your own leadership during COVID?

Ken Chenault 36:53

It's really getting back to what's most important in your business? What are the basics, number one, number two is, what are the values that are going to drive your company and cast your actions in the context of your values, because the organization really needs to see it. And so there, Airbnb had to do major layoffs. And I think what was important is Brian Chesky, was decisive. But it was also very compassionate. What I've really learned through COVID is one the important is boy of fortifying yourself, because no matter what our position is, in business, or non business, each of us was impacted by COVID, obviously, some and a far greater level. But for me, I sort of re examined again, what should I stand for? What's important to me, and also to understand that there are a set of societal issues that have been created by COVID that need to be addressed. There are a set of business challenges. But also, there are a set of business opportunities as a result of COVID. And I think that's part of what needs to do from a leadership standpoint is understand, what are the marketplace changes that have occurred? What are the competitive issues that are there? And then what are the opportunities that you need to pursue with your respective business? And I think that there are a range of opportunities. And at the same time, there are a set of challenges, that I think creative businesses can be very helpful in causing some relief, but also, at the same time, I think can be very successful commercially.

David Novak 38:34

Can, as I mentioned earlier, you were amazingly, the third black man to become a fortune 500 CEO. You know, that's such an accomplishment. What responsibility do you feel to inspire young kids of color through your own personal example?

Ken Chenault 38:50

Yeah, I think what's important there, there was a, you knew this person, and he certainly was a terrific mentor, and friend to me, Vernon Jordan. And he said, if I give you any advice for what you're dealing with, as a black person in corporate America, understand this, we stand on the shoulders of so many. And our job is to lead our life that people will want to stand on our shoulders. So I think there is a responsibility to really exhibit the type of behavior that people will want to emulate. I think it's important to be a mentor to people of color. And I think as you know, I'm I'm a mentor to a range of people, all types of people. But I think it's incumbent upon me, it's not enough to say, I'm just going to do a great job in business, but I don't really care, or I can't be involved in anything else that happens in society. I think that's a cop out because the reality is, there are only a few of me if there was several 100 Maybe a different story, but there are only a few. And so I think I've got a responsibility to make Make a difference not only in business, but to make a difference in our society. Well, one way

David Novak 40:05

you're definitely doing that kin is your 110 initiative that you co founded. Could you talk a little bit about that?

Ken Chenault 40:11

Sure. And I think this is, I think, a good illustration. So, two days after the George Floyd murder, Ken Frazier, the CEO of Merck, and I, and we've known each other since law school, we were talking about what could we do, and their range of things is criminal justice reform set of issues. But we said where we could have an impact in the private sector could have an impact is, in fact, to be innovative relative to creating jobs, family sustaining jobs, for black Americans, and to have corporations work together. So here's the issue, a number of companies really do want to hire more black Americans. The problem is, they're employing the same tactics and strategies that haven't worked. And in their own businesses, they wouldn't continue to employ strategies that were not getting results. So part of what we're doing is we're developing an ecosystem of jobs, suppliers, firms engaged in Workforce Education, Training upskilling. And then we're working with companies. And so what's important here back to doing something that will be enduring, we now have over 42 companies, most of them fortune 100 companies who have signed up for a 10 year financial commitment, and a 10 year jobs commitment. And the focus here is on black Americans who did not go to college or did not finish college, because that's a segment that is really important to bring about a change. And what's interesting is in corporate America, close to 70% of the family sustaining jobs require a college degree. And the reality is based on analysis that has been done, a good percentage of those jobs really don't require a college degree. So here's what we're not doing. We're not compromising on the quality, we're not compromising on the standards. But we're saying we can change the specs, we can, in fact, change our approach. And we can get traction. And some companies have actually started on their own way before this to do it. But now what we're having is this aligned commitment, a sharing of best practices, a set of innovative tactics and strategies. And our goal is to have a million jobs. And I think if this works, my view is three or four years from now, we're going to be able to up that target. And what will also happen, David, because we're having this focus is as a result of respecting jobs, it's going to help everybody. So you know, this is not a either or situation. And I think with a lot of the strategies, you can, in fact, solve the issues and problems of a particular group. But you can do it in a way that also benefits a very broad group.

David Novak 43:02

That is just great. You know, again, this has been so much fun. And I want to have some more before we wrap this up with a lightning round of q&a here. So are you ready to go here? Yep. All right. Three words that best describe you.

Ken Chenault 43:17

Boy, three words is quite good. I still do define reality. Give hope for

David Novak 43:21

that's, there you go. Okay. If you could be one person for a day besides yourself, who

Ken Chenault 43:27

would it be? Nelson Mandela?

David Novak 43:31

What's your biggest pet peeve.

Ken Chenault 43:35

But, you know, I don't really have a pet peeve. If anything. I just want to get to where I want to go fast. So I don't like things that slow me down.

David Novak 43:46

What's something about you that few people would know?

Ken Chenault 43:50

I used to be a pretty good singer, biggest learning

David Novak 43:52

serving on the Berkshire Hathaway board watching Warren Buffett in action.

Ken Chenault 43:57

Biggest learning from me is the amount of time he spends on people. And the amount of time he spends on making sure you have a context for decision decisions that are going to come down literally not just in the next year, but in the next five or 10 years.

David Novak 44:19

All right, two more questions. What three bits of advice would you give aspiring leaders?

Ken Chenault 44:24

My words of advice would be integrity is absolutely core and define what winning is, and then make it happen.

David Novak 44:35

And you mentioned it earlier. Kathy's been a wonderful partner in your life and you have a fabulous family and air you are you have not retired you are you have refired you're going at it 24/7 Now, how do you balance it all again?

Ken Chenault 44:50

So what I would say David is you really have to be clear about what your values are. And for me, which has been a learning over time. I'm is it's always been family and friends are most important. But for me, I've got to be fulfilled. And I got to do things that whether it's business or in life, that are helping people, that's what motivates me. That's what I get excited about, I love to win. And that gives me great satisfaction. But what gives me unbelievable satisfaction is when I believe I've really had an impact on people, and I've helped them,

David Novak 45:28

you know, can, I want to thank you on behalf of so many people in our country for the difference that you are making, you know, for taking on this 110 initiative, and for just being the example that you set pushing for social responsibility. You know, all of this is making our world a better place. So I hope you feel fulfilled, because you're you're definitely making a great difference. And thank you so much for being on this show.

Ken Chenault 45:53

Well, thank you so much, David. And I know this is your podcast. But what I would say and I've said this to a number of people, what was very clear to me in my first meeting with you, is you're a person who's driven by values, and you care about people. So thank you, thank you.

David Novak 46:19

I want to give you a great example of constructive conversation that happened to be, you know, I always like to see myself as the king of recognition. I love giving away recognition awards, I loved being out there with the people and tell them they were doing a great job when I saw it. But one time I'm in my office, and I'm with my finance people, we're getting ready for an investment conference. So we're really grinding on making this presentation really good. And outside the hallway, I hear this roving recognition band. This is a band that was created yum brands by a group of people who are passionate about recognition. And they go around in the halls and they find four or five people each month that really needed to get recognition and deserved it. And everybody would come out in the hallway and join them and recognize them and make it special. So the CFO says to me, we got to go out there and join him. I said, No, we got to get this done. And he says, No, you got to go out there. Because you are the king of recognition of this company. If you don't go out there, you're going to be saying to people that this really isn't that important view. And you know what? He was so right, he was willing to engage in constructive confrontation and gave me the right solution, which was to get my butt out there in a hallway and be happy whether I wanted to be happy or not, and join in in that recognition. And I did it and I am so glad I did. So clearly I have been the beneficiary of constructive confrontation. So this week, I want you to try it. Give someone direct feedback, I want you to do what you learned from Ken Chennault. I want you to engage in constructive confrontation, lock arms with whoever you're working with, and let them know that you're on their side. So do you want to know how leaders lead? What we learned today is that the great leaders know how to engage in constructive confrontation. Thanks again for tuning in to another episode of how leaders lead where every Thursday you get to listen in while I interview some of the best leaders in the world, I make it a point to give you something simple on each episode that you can apply to your business so that you will become the best leader you can be. See you next week.

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