Amex CEO Kenneth Chenault on reinventing your brand

Ken_Chenault

The American Express Company or Amex is a financial services organization that has needed to undergo change from the time of its inception in 1850 until the present day.

The company had beginnings as an express mail delivery service in New York. The founders were Henry Wells, William Fargo and John Butterfield. Wells and Fargo would start another business together in 1852, which was Wells Fargo & Co., which was a solution to a dispute with Butterfield and other directors.

The American Express Company would expand into financial services during 1857 by creating a money order business.

During the late 1880s J.C. Fargo the eldest son of the co-founder William Fargo travelled to Europe and found it difficult to obtain cash while he was there and he went to Marcellus Flemming Berry who worked for him at the time to create a viable solution. Berry created the Travellers Cheque, which was introduced in 1891.

The business boomed and American Express enjoyed a monopoly along the railroads and by the end of the World War I was delivering around 150 tonnes of parcels each day.

In 1917 during World War I the USA was suffering with a shortage of coal and the President at the time Woodrow Wilson ordered that the railroads be used to serve the needs of the country. All contracts between railroads and freight companies were terminated. The American Express Company would need to be consolidated into a single organization with all of the other freight companies and this would end the freight business for American Express.

The new consolidated Company would be called the American Railways Express Agency and would be launched in 1918 and American Express would own 40% of the combined Company.

The birth of the Diners Club card in 1950 caused another change in the direction of the American Express Company.

A year earlier in 1949 at the Major Cabin Grill restaurant in New York, Frank McNamara was having dinner and he had forgotten his wallet in his other suit, his wife paid the bill and Frank had an idea. He wanted to be able to have a card that would be able to pay for goods and services without needing to use cash. He discussed the idea with his friends and began to work on the idea. McNamara would return to the same restaurant the following year and managed to pay for his meal using a cardboard charge card and a signature with a promise to pay later on.

American Express would enter the market in 1958 and would issue its first charge card, which would require to be paid off in full at the end of each month. The first cards were made of paper. It also had a yearly membership fee of $6, and this was $1 more than its rival the Diners Club card. Plastic cards were introduced in 1959.

The Gold Card was introduced in 1966, the Platinum Card in 1984, and in 1999 the Centurion Card which is sometimes known as the ‘Black Card’ which is an invitation-only card for current Platinum card holders who have millions in assets and who spend a significant amount a year with Amex.

The current CEO of Amex Kenneth Chenault speaks about the need for reinvention as circumstances always change and the need to deal with unforeseen circumstances in the mark of an enduring company.

Ken Chenault: Reinventing Your Brand

Company: American Express

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