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Rapid Response: Why business must be a force for good, w/former American Express CEO Ken Chenault

2021-06-17

"Corporations can be a force for good – and they can also be very successful," says Ken Chenault, chair of investment firm General Catalyst and former longtime CEO of American Express. During the past year, Ken has been an outspoken advocate for business leaders to actively engage in societal matters. After George Floyd’s death, he and Merck CEO Ken Frazier launched OneTen, a coalition to create 1 million jobs for Black Americans that now includes major brands from IBM to Nike to Walmart. Chenault has pushed corporate chiefs to use their leverage to protect voting rights, and he's come out with a platform for Responsible Innovation that puts what he calls “social due diligence” alongside financial due diligence. Standing up for what's right, Ken says, fuels long-term success: "The most important thing is the quest for truth, character, and values."

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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
In a crisis, reputations or major lost if Don't have core values believes you fall. Trust is so important in a crisis, because people are scared. I went through different crises. There was a mantra that I still think about everyday define reality. Give hope we have. It responsibility and an obligation when people say to me business should stay out of society. I would the that, if we're going to prosper in the long term, we do strong society. I was very populous of the fact that I was blocked in a sea of white. There
to be recognition that raises America's greatest unsolved problem. This is not political. This is, partisan and my view is frankly, if you can't stand up for that, I don't know what you stand up for. That's Kinchin or chairman in managing director of investment firms, general catalyst and former chair. when the chief executive of American Express can is among the most prominent and respected executives in all of business and one of the few long time black sea owes at the top of corporate Amerika, I'm Bob Sassy and former editor fast company, founder of the flux group and host of masters of scale. Rapid response. I wanted to talk to him because during the past year, he's been in out spoken advocate for business leaders to actively engage in society. Matters after George Lloyd's death he and mercy YO can Frazier launched one ten, an initiative to
one million jobs were black Americans. They now includes dozens of major brands from IBM to Nike to Walmart in twenty twenty one should not has pushed corporate cheese to use their companies. Leverage to protect vote rights kins unassailable success as a leader gives each new wants of his words in his perspective, especial residence and his passion and conviction our river, we'll start to show in a moment afterwards, from our spot deal maker, you see a robotic Berger flipping arm moving around in front of a hot friar. That's growing off oil, splattered and learning and correcting himself. If he makes a mistake, it feels like the future is here: that's Rebecca cassava
founder and ceo of deal maker and she's talking about Filippi, an invention me so robotics that could transform the fast food industry B is more than a metal fry cook he's also a fund raising tool me robotics is a newer company, but they had that really strong imagery that people coming We resonate and see a use case for someone it's time for me, so to raise capital, they put a video Filippi on their website and video turn visitors into investors using the platform built by deal maker homemaker is in a word shop of five for the capital market, so we are striving to make it as easy to sell, shares online as it is to sell shoes missile robotics raised twenty six million from over five thousand new investors, but you don't need Viral video to drive your next capital raise will hear how companies found their ideal investors later in the show, learn more
they'll maker at deal maker, Doc, tuck, slash masters of scale that deal maker, dot, tuck, slash, masters of scale, I'm Bob, afghan and I'm here with tension or managing director of general cattle and former longtime ceo of American, Express can't thanks for joining us, it's great to be with you. So we are living through an unprecedented era and precedent chain challenge opportunity. You lead Americans, rest through nine, eleven and the great recession to intense crises and during the pandemic. From all over. We know turned to you for advice: Brian Chaskey, the co, founder and sea of air being be was on the show, just a little while ago cited your council. What lesson from your experience is
was most valuable over the last year that people asked you about the most, and I guess what different this time around every crisis has different characteristics, but I think what is very important in any crisis is one. You have two in fact, put people front and center was also very important in a crisis is what is the core mission of the company? How are you using the mission of the company to in fact, give context to the strategies and tactics that you're putting in place, and, very importantly, are you dealing with the short term issues against the backdrop of the values?
the company. Are you taking the opportunity in a crisis to understand what the impacts are a business in the moderate to long term, and are you selectively investing? Those are some of the key point. That I made to leaders is that in a crisis Reputations remain, are lost, and so what's very important, as you gotta say your people, not just that you care about them. What are the actions you're taking that demonstrated you ve gotta be decisive and you have to be careful and sometimes people think that's contradictory, you need the hearts and minds of people as your leading through a crisis as I'm listening to you, it sounds in some ways like
this is a clarifying moment. But some of these lessons are things we should be doing all the time. Then rights, important Bob, some of the actions have to be exaggerated during a crisis. The reality is, you have to always be decisive. You have to be carrying, you have to demonstrate integrity, but what happens in a crisis? These things are coming at you at such rapid speed that if you don't have that in your core- and I think that was very important- about, for example, Brian Chest- he had ever been dick. Was that what we talked about was he really focus on? What was the mission of there being be the importance of his people, but at the same time he was decisive. He took painful actions, but he did that with carrying, and I guess is
speed of these decisions and challenges, com, the stress rises right, and so, if you have that core to fall back on, you know where to go. At some places. Maybe when there isn't that core, the stress heightens the need for finding that mission. You are absolutely right. Bob at the end of the day If you don't have those core values and beliefs, if you don't mind a clear understanding of the mission and these strategic framework of the company in a crisis, you fold, your behavior becomes erratic and trust is so important in a crisis. Trust from your people, your employees, trust from your board, trust from your investors, because people are scared.
I went through different crises. There was a mantra that I still think about everyday define. Reality give hope how my defining reality, which is very difficult in normal times, but pretty equally challenging in a crisis and then What are those areas that I can emphasise that can make people hopeful? What are the strategy's? What are the tactics that I'm putting in place so on top of a public health crisis, that we were dealing with with covered nineteen and the pandemic? We also had a racial justice crisis that layer on top of it were now a year after the murder of George Floyd There were so many instances of violence against black Americans and have been for a long time. Do you remember where you were when you first heard about George Floyd and what you did?
Yes, I was in New York and I certainly talk to my wife, Cathy. I talk to my two sons and I talk to some good friends in CAN Frazier the CEO of Merk has been a close friend since law school and the afternoon and the day after we talked about what we can do and what we thought was the focus should. the on jobs not to the exclusion of criminal justice and a range of issues, but we said This is an area where we can have an impact and then, as we talked about it more, we said clearly were focused on opportunities for black Americans at every level, but the segment that we think is very challenged,
is the group of African Americans, which is very large that do not have a college degree or did not finish college, and what is it that we could do in job training and obscure? I do in fact create a million jobs in ten years, and so that was the founding mission of one ten men. we quickly call Jenny, Wren many. She thought it was a great idea. She came aboard caverns, you're Charles Phillips and we now have fifty companies that have signed up for a ten year- commitment Post, George Floyd, there have been a lot of proclamation, What's gonna be very important is what are the actions that are being taken? There has to be recognition,
that raises America's greatest unsolved problem and we ve got to have a sense of urgency and also at this The same time we have to have a long term commitment is there. I don't owe more opera. To the more pressure or more recognition by businesses that they have to get involved in issues like racial justice and Rachel Could he then there were when you first became CEO American, express him in a climate for what the role of a business is has shifted a little bit. It has shifted one of things, I would say Bob and not to boast, but I've said over the last close to fifteen years. That cooperations exist because society allows us to exist and we have a responsibility and an obligation and wars.
Things that I point out is yes, the role of corporations has evolved, but I'll give you an example. Ibm Tom Watson, founder of IBM in the early fifties, came out against separate, but equal, and so when people say to me, business should stay out of society. I reject that because I have a long term perspective for cod the needs and if we're going to prosper in the long term, we need a very strong society. So, yes, we can't speak out on every issue but, for example, while the issue of voting rights. What is more fundamental, that's the life blood of our democracy, just think. If more businesses,
had followed Tom Watson and I IBM and condemn separate but equal but also said, were actually gonna higher lack employees. We would have been able, more advanced society. Then we are today must be very clear business. gets involved in issues that affects their business and has a broader impact on society, but yet some of these name, people are saying I don't want to get involved in the broader society, but I'll get involved in issues that affect the border society as long as it helps my company alone that doesn't work? There are some businesses. Some city has recently COIN Base base camp. Other things you sort of dictated that the workplace is an appropriate environment for having those discussions you disagree with that. Yes, I do. Let me be very clear. I
We thank the workplace is one where you're getting into arguments every day and you're not doing you work the priority. Clearly here to be you. Do you work but to in fact say I dont want you at your break to in fact engage in talking about issues aside from work. I just don't think that's appropriate. Are you telling me I can't talk about my family? I can't talk about things. I believe in that I'm passion about I would ask people who take that position is. I hope you ve been remain consistent. That. You will not talk about broader issues that will benefit your company. You cannot have it both ways and I don't believe in that type of censorship You mentioned that after George Floyd, you spoke to CAN Frazier and it sort of lead to the creation of one ten. Earlier this year you paired up
and again to organise open letter about voting rights and you got hundreds of companies and executives decided. How did that come about here? So a few days before the statement as we became more aware of what was happening in Georgia and then other states. We frankly said we gotta do something and we had the idea that what we wanted to do was in fact to write a letter to corporate Amerika and say that voting rights is fundamental to our democracy. We believe capitalism. we believe in our democracy, but the life blood is voting rights. What we also said is for black Americans. The path to voting was a tortured path. People were killed for protesting the right
about the need for the right to vote, but for all Americans. This is a fundamental right and I think what was particularly impact for is a corporate. Erica responded resoundingly and who would have there really is a matter of days. Hundreds of people would come together a major companies from every industry sector and clear there were some people who said by work concerned that this could be political. We said this is not political. This is non partisan and this is a fundamental american right and My view is frankly, if you can't stand up for that. I don't know what you stand up for before going into business. You are,
why you're thought about going into civil rights law and now you're gonna come full circle. You are and activists from a corporate perspective in some ways. Now, with that, a conscious harking back, are you always thinking I'm gonna get back? There is something. sort of came to you hear what I would say growing up. I just wasn't exposed to business so that wasn't an aspiration for me. I never dreamed about being a ceo. What is I looked back? I clearly want to make a meaningful difference in people's Ives unconsciously? What I did think about in my mid twenties was business as the next civil rights frontier and that I could play a role, and so let me be very clear: I was focused on in the marketplace. That was very important to me, but I also was focused on bringing about
A change, and I was very cognisant of the fact that I was blocked in a sea of white and that there was an opportunity, and I think what I feel very good about is not just my business successes. But the fact I think I made an impact on people at American Express outside of American Express, and I think I had a activists, mentality, and I had this- is a mission for American Express to be one of the most respected and admired companies and to be admired company. It meant that we had to embrace all types of people and I just believe that cooperate.
It can be a force, and I really do mean this a force for good, and they can also be very successful. People would say will can that's a contradiction and, I would say part of What we need to do as leaders is we manage and led through seeming contradictions will be back in a moment. Afterward from our spots deal maker, we're back with Rebecca Cassava deal maker earlier in the show she told us about a robotics company that did a capital rays, right on their website it something that would have seen impossible just a few years ago Rebecca knows this, because she was there. I worked in. law firm for over ten years with a lot of early stage, as well as public companies raising capital going public mergers, and one of the pain points was in.
Capital raising process. We saw our clients having such a painful expensive long, frustrating time trying to get the capital in the door. in closed and that's a hard thing to watch watching those clients struggle. Rebecca defined an easier way now deal maker provide businesses with online portals, so they compete globally and specifically take the Toronto based company carbon streaming. They found businesses that produce carbon credits. They were very specific about. The type of investor that their story resonated with carbon credits is, is a complex thing to x It's not an easy elevator, pitcher tagline, but everybody understands trying to make the world a better place to live in and they understood a very targeted audience that would appealed to, and so they were able to go out and do that very successfully
urban streaming not only surface there ideal investors they raised over one hundred million dollars. How did they stand of so many investors with data analytics our data when Ex allows you to see who are the real buyers and where direct, your energy to closing those investors and die how you can really target and save. huge amounts of marketing dollars raising capital is painful now, but deal makers still finding points of friction dissolve will hear about those later in the show You can learn more about the yell maker at deal maker, Todd Tech, Slash masters of scale. That's deal maker, Dodd, tuck, slash masters of scale. I think, there's some leaders now, maybe always who worry that getting involved in social issues or political issues will alien some portion
of a perspective customer base or employ baser shareholder base. Did you think about that sure? So I think what's important is in managing a business and in making some tough decisions, you always risk alienating some group, you always risk it. For example, I didn't get involved in endorsing candidates who were running because I just did think that was the role of business. However, issues that impacted people saw in the nineties same sex benefits health benefits that was important. that wasn't a political issue, that was an issue if we're accompanying that's embracing all types of people that something we have to speak out on, and we, the act. That's why look at voting rights and their certain environmental issues. I took this
actions on a range of issues? There was a major case, the brutal case, which was an affirmative action case in Michigan I got a number of ceos to file an amicus brief and also the U S military file that to make his brief, general files and to make his brief in the world we live in today, people would say: oh my gosh. What are you doing and there were a number of companies it said? Can we can't do it? Cause were concerned about the follow up that to me? Is a cop out It sounds like to you thought about your role as being an unknown I want to say a model because that's almost too narrow, but it's more like a opportunity for impact in whatever environment you might be in yeah. I think Bob! That's right! I do want to have impact. I want to make a meaningful difference in people's lives, so well
It's in business, whether it's in my personal life, my philanthropic endeavours and of someone tells me that making a meaningful Difference in someone's life is incompatible with being success. For the men are really understand what successes cause. I'm an incredibly competitive person in business, but again when the right way- and I want to win in an enduring way. That's what's important to me. You co wrote an up ad recently about responsible innovation, about being aligned with society. To what extent was this arrest
bonds to how technology like social media has impacted public discourse in politics or broader unintended consequences. Yeah, it's much broader, so my partner, I'm on Tunisia, whose managing partner at the firm we ve talked about the role of technology and fact that technology needed to act more if you will, with a mindfulness of impact and given the advances in technology, the advances in a sigh and machine learning we should be in a position to better anticipate different issues. No one's gonna be perfect, but at least have a free, work? What we are saying is that responsible innovation should be integrated. In to the way you conduct your business and for start ups from the beginning and venture,
capital firms from the beginning, as we do financial due diligence, we should do social due diligence and we came up with four pillars. One is economic opportunity and inclusion. What we mean by this through innovative. Technology leaves no group behind a marginalized think through. What's the impact of this technology when groups second pillar was the environment and sustainable
Many we gotta once this from the outset and by design the operations in products that are sustainable and really serve the well being of people on the planet. The third was openness and diversity. No one sets out to say, I'm gonna create a company that will do bad things to people and the fourth pillar was privacy and Satan. You think about this. Customers dont want to be treated like a product or be nor did as just users I mean I have a real problem when people say to me will hear my users. What does that mean? We ve gotta, be more customer centric, we ve got understand how we are using people's data. How that data is being
potentially misused, and so we are frankly here on a crusade, and we think this concept of responsible innovation is something that work in a really focus on within our firm but also side, our firm, and we think that there are a number of founders that this philosophy he is gonna, resonate with them and this philosophy there are moral elements, but it's not just about morality. This is good business for building a long term modern organisation. That is right, but we want to work with companies in founders that want to endure. We want to be very successful in our investments and we think the way to do that is to follow this. If people follow
These four pillars: they're gonna, build a really strong business in the short, moderate and long term, so I don't necessarily have to believe all these things with my heart can know them with my head and say this is a smart joy, that's right, you're, absolutely right ones. I say to people when I talk about responsible innovation. Is the great brands have very strong emotional connections, just think about the great brands? It's a cluster of values, both rational and emotional. So I want both. I want. The rational and I want the emotional so as you're mentioning sort of new technologies. I just wanted to ask you, since you have such a deep history in the financial industry, about crypto hooker and see whether you have a perspective on what the impact of crypto will be. We do have some investments and quit
I think it is emerging. I would say in American Express certainly followed it and we invested in blockchain, which we thought was very important. I think, what's gonna be critical in crypto, ultimately is gonna, be that people trust and so part of what we gotta do is demystify Crypto, like any new category there, be all the sceptics that are there. I think Crypto is here to stay. It certainly is being used by a range of customer segments and I think when very much in the early innings. What can this has been great? This year has been so high Third, and there is so much opportune-
and risk, as we talked about through this, what's at stake in this moment for businesses for business leaders. But I tell you, I think it's hard for me to separate what's at stake from what is happening in our society and I think Bob what is at Stake- and I think we all have to fight for this- is the truth- matters character. Matters are behaviors matter What do we stand for to me? That's. What's at stake business leaders, it is more important than ever that people see that we stand for something that we have values. We have believed. Yes, I think what also at stake is
need to have continued focus on innovation. I think that this philosophy of responsible innovation needs to be adopted, but I would say the most important thing to me is the quest for truth, character and values. We can thank you for sharing your values and your quest with us I really appreciate your taking the time in dealing with us. Thank you, enjoyed spending time with the above and now. A final word from our sponsor filmmaker. An entrepreneur pursue was building a beverage company. From a small town and he was trying to buy more inventory, we're back one more time, Rebecca Cassandra of deal maker, her mission, is to help answer or raise capital for their dreams? Those dream can we as lofty a saving the planet or as simple stocking up an inventory?
the small town business owner Rebecca recalling he was true. I to do a retail capital raised with entry national law firm and it was asking him almost as much as he was raising them I showed him how to put his offering document on his website and how to drive customers there to become investors. When I showed him the product, the rule beef and delight on his face. It was absolutely ground fine for me. As the norm, for new era that leaf and delight Rebecca sees it all. The time now is dealing girls out new ways to make buying easier for the seller and the buyer. You can I the securities with credit card Asia. Age expressly. Irish Crypto payments. When people find out on our system that you can purchased securities on a credit card. There absolutely shocked gnats what we are doing in the background to make sense
security is as easy as selling shoes to fight how deal maker can help you raise the capital. You need go to deal maker, dot, tech, slash masters of scale, that steelmaker dot tech, slash masters of Sky massive scale. Rapid response is a wait. What original the show is recorded remotely using sanitized audio. I'm your rapporteur, thanks. Host Bob Sassy host for messages. Scale is red. Half our executive produced in June, calling in daring trip Superman producer is J Punjabi job. Our producers are Jordan, Macleod, Christina Gonzales and Marie Mccoy Thomson, our music rectories, Ryan Holiday, original music and sound designed by gang illness and bound in the holiday rather oh editing by heave Jane Nelson Stephen Davies and Andrew North mixing, ask five. Might Gallagher special thanks Emily
and Sarah Salmon Kelsey Competent Team, Cronan, Charlie Manassas, Adam finer and a busy. Now then Richardson mean Curacao. Our this happy ever call on how become number of massive scale to get access to a years worth of courses in content on the a massive scale courses and find out. Or a messenger scale. Dot com, slash membership, visit, masses of scale that calm, slash, rapid response to climate transcript for this episode and be sure to subscribe to argue male newsletter.
Transcript generated on 2022-03-14.