It was a real treat to hear Ken Chenault, former CEO of American Express, share his leadership insights with Carla Harris, Vice Chairman of Morgan Stanley, at the 3rd Annual Senior Multicultural Leadership Conference hosted by Morgan Stanley in New York City.
His practical and authentic lessons show why Ken is one of the most successful and respected CEOs of our time. As you read his insights below, you’ll see that he really means it when he says, “It is a privilege, not an entitlement, to lead.” An excellent reminder for anyone who leads or aspires to lead their organization.
Be Compassionate and Decisive
Great leaders understand that it’s important to take care of their people and stay accountable to the business when they make decisions. Leaders sometimes shy away from compassion because they confuse it with being indecisive or unable to make tough decisions. Ken showed his ability to balance these two qualities as he recounted the tough decision he made to lay off 15,000 employees after the economic downturn.
He believes that in these tough situations, people don’t deserve what’s happening to them but the circumstances demand it. In these critical moments, it’s up to leaders to show that they care and to take care of their people. Despite having to make this difficult but necessary business decision, Ken displayed compassion by devoting resources to help displaced employees find new jobs and opportunities. He held his executive team responsible for employee engagement and tied their compensation to an employee satisfaction survey sent to both existing employees and those who were let go. His actions during this time were given high ratings by both these groups. Ken reminded all of us that leaders who fail to take care of the business and its people will lose their privilege to lead.
Constantly challenge the status quo
“If you’re not moving, you’re falling back”. Ken stressed the importance of being innovative and striving to become the company that will put your current company out of business. He argued that it is not just about managing competitive threats, it’s about understanding what customers want and to focus the firm on better serving those needs. His litmus test for whether a leader or company is serious about innovation – look at the organization’s actions and the size of their R&D investments.
Know and run your business well
“Stay liquid, be profitable, and selectively invest in growth.” This fundamental lesson has come up in talks from both Alex Gorsky, CEO of Johnson and Johnson, and Mary Barra, CEO of GM. It’s worth paying attention to and as a leader, Ken believes that it is your job to think through the consequences of your decisions. As echoed in billionaire investor Ray Dalio’s Principles, you want to have a strong sense of your reality and go beyond 1st order consequences. The ability to look at the 2nd and 3rd order impact of your decisions will help you better lead your organization and yourself.
Strive to be a better leader, not to be CEO
Ken never aspired to be CEO when he first agreed to work for American Express until he was approached with the possibility later in his career. He just focused on adding value to the company. If you are great at what you do and ambitious, you are probably on the fast track to the top. Once you recognize that, it is easy to play it safe and be more calculated and self-focused in your approach. Avoid this tendency. Don’t be a “maintainer” – keep taking risks and focus on helping the company and those around you succeed.
It is hard to get 1) the top spot if you’re just managing what already exists and 2) people to follow you if they feel like your actions are just about you and forwarding your agenda. No one cares if you get promoted unless it helps them achieve their goals.
Place a high premium on integrity and trust
Ken values these two qualities above many others because they are the basis for forming your reputation inside and outside your company. Periodically ask yourself,
“How consistent are my words and actions?”
Your answer to this question will tell you whether you are leading your life or your life is leading you. Ken ends his talk by emphasizing that all leaders should clarify their values and know their priorities. What do you live for? What’s the inspiring vision you have for your life?
Ken’s vision for himself is to “be successful as a person who stands for something”. What’s yours?
