Facebook's Sheryl Sandberg and Ken Chennault of American
Express discuss how social impacts and changes business.
had a great day so far and that the
breakout sessions have been really
useful to you and thinking about how to
use all of these social technologies
today has been about you
it's been about how you build essential
connections with your customers and how
do you take those customers turn them
into fans and make them become the best
brand advocates you've ever had we've
shared a lot of examples around how
social can transform your marketing and
we fundamentally believe that if you
start with people at the center and you
think about your entire marketing
platform it will be better however it's
not just about social marketing we have
seen now examples of companies
rethinking how they do business we know
there is more that social can do the
leader in thinking about this has been
American Express they've embraced social
from the very top starting back in 2010
with Small Business Saturday it was a
campaign it was a marketing idea it's
now a movement in its first year in 2010
they achieved 40% awareness and they
delivered business results
a 28 percent increase in the stores that
were small businesses versus 9% overall
for the industry in the second year they
just delivered 65 percent awareness but
it became more than just a marketing
idea Congress declared Small Business
Saturday in official Day and for those
of you that had a chance to see the
Oscars on Sunday night
American Express declared that every
Saturday should be a small business and
they didn't stop there they then used
our Open Graph technology and launched
Lync like love back in July and just a
couple of weeks ago we
to take the whole concept globally they
are true leaders in understanding how
social can not only transform marketing
but can transform business and it's not
by accident it's because it is CEO lead
and they have an incredible team that
works with our team as if we were joined
at the hip that leader is Ken Chenault
who joined American Express in 1981 he
became CEO in 2001 just a few months
before the towers went down next to his
headquarters and he lost 11 employees he
then endured the financial crisis and
through all of this he has led an
institution that has been around for a
hundred and sixty two years two
incredible innovation he is a revered
leader he's on the boards of IBM Procter
& Gamble numerous nonprofits he's on the
president's job Council with Sheryl
Sandberg he is an amazing leader that
sets the vision from the very top and he
is one that has fully embraced how
social can impact and change business
without further ado it is my privilege
to bring Ken Chenault on our very own
Sheryl Sandberg to talk about leadership
in the 21st century how building
essential connections will be crucial
for business going forward and our
overall state of the economy
welcome Sheryl and Ken
here you go oh thank you Sharon oh well
thank you thanks Carolyn for the
introduction thanks all of you for
staying with us into the afternoon and
most importantly thank you to Ken for
being with us today great to be here
Cheryl so today is a big day for
American Express they have their senior
management meeting twice each every year
and it's today so it wasn't the best day
but at least you were in town and we
made it work so we are super grateful so
American Express was founded 162 years
ago for a company like mine that seems
like a very big accomplishment and a
very long runway
and even I think with that kind of
historical perspective these are
challenging economic times and obviously
in your position you'd have a real view
of what's happening you know how much
consumer confidence is there really is
there really a fear of a double-dip how
worried are you about the global economy
the US economy here's what I would say
is I think I am cautiously optimistic
but I'd underlined cautious very
strongly the reality is if you look at
the United States and we look at our
spending last year we generated growth
of 15% growth in Billings that was off a
very strong year of 15% in above the
previous year but the reality is that
the unemployment rate we know while it's
improved is still very high I don't
think people focus on enough on housing
in fact there were two professors at UC
Berkeley who did an interesting analysis
looking at counties and looking at
credit data of those counties where
consumers were highly leveraged and
where they weren't and you saw a
tremendous difference in purchase
patterns what we've seen however is that
the American consumer is pretty
resilient
and that I think is real encouraging
what we've also seen is as far as credit
performance the percentage of people
that have bad debts is at all-time
historical lows but what's very
concerning is that the loans outstanding
and we're a business model that in fact
is not dependent on loan growth because
a large percentage of our customers pay
in full but for the economy you really
need loan outstandings to grow there was
flat growth year to year as I look at
Europe I think obviously with the
sovereign debt situation it won't take a
lot for things to go wrong so I would
say I'm concerned about that and the
spillover impact on the u.s. is real
so if Europe goes sideways that's going
to have an effect in the u.s. Asia
obviously presents strong growth
opportunities but I don't think you'll
find anyone who will say that Asia is
going to dramatically accelerate from
where they've been but I think what's
important and I would emphasize is that
in times like these I'm a firm believer
that companies that are focused on
innovation can grow I don't use the
excuse of a slow growth economy in fact
the card the American Express card came
out in 1958 ancient history but that was
one of the deepest recessions that the
u.s. faced and so what's important is in
fact the focus on the customer needs to
develop that relationship and to
constantly innovate and that's where you
get the greatest competitive advantage
because in good times
most people are investing in bad times
that separates it out so I look at this
time as I'm concerned from a societal
standpoint about the overall economy
from a business standpoint this is a
time of great opportunity it's great
that's a great answer how do you then
make sure you innovate big company how
many employees do you have 60 mm 60 mm
feels like a lot I think to almost any
way maybe there are some here with
but it feels like a lot how do you make
sure that you innovate both in good
times and bad what do you do at the top
to make sure there's innovation yeah
here's what's I think very important you
know I think it's I'll make some general
statements then I'll make some points
that are unique to our company because I
think what you want to do is you want to
really draw from what is core to your
company and one of the things I've
stressed with us is that we started off
as a freight forwarding company all
right so we were not created in a dorm
room or a garage probably a stable and
what we did was we transported goods
from east to west but we built up a
level of trust we had a focus on service
but then in fact we moved to Travelers
Cheques to travel to payments and one of
the ways you drive innovation is in fact
you have to constantly reinvent yourself
and you have to be willing to challenge
the status quo and so you can't look for
example at payments narrowly the reality
is that when I talk about why we can
succeed in the digital marketplace I
talk about the power of our brand I talk
about the service and I talk about the
information and one of the things I say
is that when the card was created in
1958 it was a platform to deliver
services to the business traveler so
what you've got to do is you've got to
expand the marketplace and you've got to
get people to in fact be willing and in
my terms what I say is try to become the
company that can put you out of business
and constantly challenge your business
model but do it from the standpoint of
what are the customer needs put the
customer at the center putting people
first perfect absolutely Russ so when
you think about managing and leading a
company one of the most common questions
people have you know our great leaders
born or made so I'd love to know what
you think of the answer to that question
and also how do you think about not just
your own leadership at American Express
but the leadership of the team you're
building sure I think clearly there are
some people who are
born leaders but I'm also one who
believes in self empowerment I really do
believe that people can make themselves
into a leader and I think it's like
someone who's a natural athlete if you
don't practice if you're not disciplined
if you don't work hard at it you're not
gonna be at the top of your game and so
I really do believe that you can
understand and work with and study how
to become an outstanding leader but it
means you have to have a great level of
self awareness and one of the things
that I try to do from a leadership
standpoint and I try to do in our
company is one my favorite quote of
leadership that I think about every
single day and leading our organization
comes from Napoleon and I always preface
this I do not want great heat up like
Napoleon but what he said was that the
role of a leader is to define reality
and give hope and if you think about any
organization any country any company
that's part of what we got to try to do
is how do we define reality but then
where does the inspiration come in where
does the creativity come in and that's
the hope part because part we have to do
as a leader is you got to create a gap a
vision that galvanizes people you have
to in fact empower people to be change
agents you have to engage in this what I
call constructive confrontation you have
to constantly attack the status quo and
what's very important in a fundamental
way that I believe in strongly is that
integrity and from the integrity is
consistency of words and actions that's
your foundation of leadership because
why am I going to trust you particularly
when any company needs to take risks I'm
not going to follow a leader that I
don't think has integrity so one of the
things that keeps us in business
over
time particularly since 1850 is how we
think about competition what's your view
you know who are American Express's
competitors and how do you teach people
and think to think about competition
within the company here's how I
characterize it first and I always start
with don't let yourself be defined by
the competition all right be very aware
I'm very competitive I want to win in
the marketplace but don't let someone
else define who you are number one
really focus on how you can create what
I call a great share of mind of your
customer because I think to have the
best relationship you've got to be
connected and you have to have what I
call both a rational and emotional
connection with your customer that's one
of the reasons frankly why we like
working with Facebook is because you
enable us to have that rational and
emotional connection but I think what is
most important is to have the ability to
drive change in your organization so in
our case we have traditional bank card
issuers and their competitors I take
them seriously we have the networks but
here's how I look at it anyone in fact
who is providing service to our
customers is a competitor because I
don't want to be reduced to a commodity
that I'm viewed as just facilitating a
payment we're a services company we
happen to use payments to deliver
services to our customers and so we are
clearly focused on traditional
competitors but the reality is as we
look at new competitors we have partners
who are competitors whether it's Google
whether it's Facebook whether it's
Amazon the reality is that I think
anyone in fact who wants a share of mind
of a custom
competitor now what you've got to do my
view is you want to affiliate and
partner with those people who in fact
will allow you and work with you to
create that relationship so we have a
clear focus on our competitors but we
don't let our competitors define who we
are and we try to define the marketplace
in a way that allows us to get a great
share of mind of our customer so since
you're here with Facebook we'll talk
about building a social business I know
this has been something that's been
really important to you we've spent a
lot of time with you and your team's
talking about focusing on people and one
of the things you guys did which really
was remarkable for a company that's big
I hope that's okay to say is really
tried to do really innovative things for
cardmembers and one of them was the link
like love program where you you know you
allowed people to connect to Facebook
how do you think about putting people at
the center of your business how does
something like that come about yeah I
think I think the link like love example
is is a terrific one because one as we
think about putting people in the center
one is what I want to do is to develop a
highly personal relationship with the
customer and the reality is that we've
always been a company that's focused on
segmentation and micro segmentation but
what we've been able to do with Facebook
and then build into link like love is
one we have the opportunity to listen to
the customer to connect with the
customer to develop a meaningful
relationship with the customer to in
fact
share messages and have the customer
share messages that credibility is
unbelievable
so on one level you know whether it was
direct marketing or emails we segmented
it and we tried to get personalized in
our offers but that was more pushing
out now what we're doing is the customer
is raising their hand and their friend
is telling them well I want this hero
offers and that allows us to then build
that connection and so as I look at the
objectives is one we're able to listen a
lot better
second we're able to provide content
because we're not looking at social as
an add-on of here's the campaign now
let's look at the social Channel
what we're looking at is the inherent
benefits of social that allows us to
create a meaningful relationship and
then we can provide value and so
Facebook has been an ideal partner
because you already have this connected
community and people are sharing and to
have that validation and endorsement is
powerful so it Small Business Saturday
Carolyn open talking about it big
success not only with your customers but
really making something a movement right
Congress declaring it a business
Saturday how did you come up with the
idea where does this where does
something like this come from you know
here's what's important and one let me
be I didn't come up with the idea one of
our relatively junior people in the
organization came up with the idea this
was last year and I believe this was ten
weeks before that's right Thanksgiving
it was very short and we remember right
Nancy Nancy but this was there and we
said we're gonna go for it
and the reason why we were excited about
Small Business Saturday was for several
reasons one is obviously the economy was
in serious trouble and we wanted to help
we really did want to make a difference
second is small businesses
are really the lifeblood of our economy
two-thirds of the net new jobs over the
last 20 years have been created by small
businesses small businesses have a major
impact on the local community we all
have friends we have family there's
something very personal about the small
business experience and then we step
back and we said you know at the end of
the day there's Black Friday there's
cyber monday but no one's doing anything
for small business and so we want to
create a small business Saturday and how
do we create a movement and a real
movement and our choice frankly from a
marketing standpoint a lot of people
talk about cause related marketing what
we decided is that American Express
would be if you will the founding
sponsor but we consciously decided that
this idea was bigger than any one
company and so remember I said I'm very
competitive I like any market share but
what we said for Small Business Saturday
is you can use any card you want you can
use MasterCard Visa discover cash what's
most important is to help our small
businesses but then what was absolutely
critical was how to get mobilized and
Facebook gave us a tremendous
opportunity again to create meaningful
relationships we were able to create 2.7
million friends I mean that's incredible
and in addition to the points Carolyn
was making a hundred and three million
Americans as a result of Small Business
Saturday went to small businesses I mean
just the awareness level in a single
year the Kallen's point from 37% to 67%
awareness so this made a major
difference we believe and then obviously
for our brand because in fact we didn't
try to hog the credit
people looked at our brand in a very
positive way and said this company is
really trying to do something above and
beyond their own products and services
so we're gonna move on to our lightning
round okay so this means I'm gonna ask
you questions you just have to answer
them first thing that comes to mind and
will you let me explain afterwards I'm
not sure
all right the audience if people feel
like they want an explanation but you
know
paper or plastic paper and you'll
definitely want me to explain all right
go ahead all right I will say because I
expected you to see may not seen this
the graduate with Dustin Hoffman but it
had a major impact on me when I was
growing up because Dustin Hoffman goes
to this business person and he sort of
says what should I do and this guy says
I got the answer for you
plastics that just totally turned me off
so when I saw that girl plastic plastics
yes although I love cards read or write
read fiction or nonfiction nonfiction
don't leave home without it or argue a
Cardmember don't leave home without it
uh-huh shop and stores are online online
ATM or bank teller ATM raw talent or
dedication dedication because at the end
of the day if you have the raw talent
which you need but you're not dedicated
you go nowhere you're sitting on the
beach it's not gonna help that's right
not gonna help you
early to rise or Nite Owl problem is I
haven't changed
you're both I'm both but if you had to
pick on vacation night owl' books on
paper or kindle here's a strange thing
when I'm reading a bio on someone I like
the book everything else I read on my
iPad baseball or basketball basketball
most important quality and a great
leader integrity Jets are giants Jets I
like the Giants but you know I got to be
honest there's always a reaction on the
sports was um comedy or drama mmm comedy
or drama drama laptop or tablet tablet
learn in the classroom or on the job on
the job first thing you do in the office
every morning here's the point virtual
world Cheryl so the first thing I do in
the morning when I'm in what I call the
virtual work zone is I go on my iPhone I
check out my Texas your face emails of
course and the same thing when I'm at
the end of my virtual work zone by the
time I get to the office hopefully I've
accomplished a theorem a lot last thing
you do before leaving for the day last
thing I do before leaving for the day is
I actually put down one or two tactical
things I want to do and one or two
things I want to think about forcing
yourself to be proactive yep I think
that's big favorite vacation spot Italy
t-rex or brontosaurus given our location
that'd be hard for me because I t-rex
easier sneakers are loafers I mean you
are but if you had a choice sneakers
sneakers hot dogs are sushi sushi crepes
sweet or savory these are the big
questions in life savory savory beach
house or mountain cabin beach house
all right you got to think before you
answer this one I pay Facebook or
this is a layup yeah it's a layup but
you know I'm in public but I'd say
Facebook but I also like Twitter okay
last question what's next for American
Express what can we expect to see you
can define the time in the next couple
months in the next couple of years yeah
I actually think in the next couple of
weeks in the next couple of months in
the next couple of years what you're
gonna see is American Express becoming a
major factor in commerce because what I
firmly believe is with the convergence
of online and offline there is a
tremendous set of opportunities and I go
back to the fact that we believe
payments is a very attractive
marketplace but we don't look at
payments alone what we believe is that
payments enables us to deliver services
to our customers and service because
that's the company we are we're in the
services business and we want to be
wherever our customers are and what's
clearly happening and I think this is
one where Apple has shown this his Apple
redefined the offline retail experience
so what we want to be is we want to be
at the forefront of change and then I go
back to I want to have a great share of
mind of our customers because if I have
a share of mind then I have a great
share of their business thank you well
thank you to Canada are you eating us
and I think thank you to all of you and
I think Carolyn's coming back just to
wrap up thank you very much thank you
good well we're pretty much at the end
of the day and we hope you've had a
fabulous experience the fun does not
stop on behalf of the entire Facebook
team we want to make sure you're gonna
stay for cocktails conversation we have
a lot of our engineers product team
marketing and research folks and then of
course at 6 o'clock
we will have Alicia Keys so how cool is
that come on New York New York let's go
so obviously there was a lot of content
today and I was always taught to try and
remember things in threes so there's
sort of three things that I think are
really important from today number one
businesses are better in a connected
world number two we're in the midst of a
pretty big transition from ads to
stories and probably most important
number three our vision for marketing is
that it is as good as any of the content
you and I see on our news feed from a
friend or a family member that's what
we're trying to do together for the
creative people in the room we hope we
given you today an amazing canvas one to
light up the graph to light up brand
stories and to frankly let your fans do
the work for you and let your fans
become the biggest passionate brand
advocates you can possibly have we're
committed to delivering business results
committed to measuring them and most of
all we're committed to being your
partner as Cheryl said earlier we have a
saying that were one percent of the
journey done if you visit us in any of
our offices globally you'll see that
sign you'll see move fast
be bold what if you would what would you
do if you weren't afraid we really look
forward to partnering with you
I'm taking marketing to the next level
and hopefully transforming your business
thank you very very much for spending
the day with us and please join us for
cocktails
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