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SSA Notebook | Winter 2016

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Leadership Has to Prioritize Operational Excellence and Innovation 

Ken Chenault on Why Amex Must Become the Company That Would Have Put Itself out of Business

Ken Chenault, Chairman and CEO of American Express, truly embodies Dr. Deming’s management principles, especially his first rule: “Create constancy of purpose for the improvement of products and services.” Amex has come a long way from its establishment in 1850 transporting freight across a rapidly-expanding America to being the world’s largest card issuer by purchase volume today. The company’s success across varied economic and historical landscapes has been driven by a commitment to innovation and to its values of quality, integrity, and customer service.

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As Dr. Deming once said, “The role of a leader is to define reality and give hope.” Chenault has repeatedly accomplished this task in times of change and hardship. Chenault’s 15 years as Chairman and CEO began just before the 9/11 attacks took place across the street from Amex headquarters, killing 11 employees. Chenault led the organization in ensuring the safety of all employees and their families and in assisting customers by waiving late fees, raising credit limits, and even chartering buses for stranded travelers. Chenault also guided Amex through the country’s worst recession in decades by investing in customer service infrastructure, talent, and training to deliver strong and empathetic customer service, and continue providing value for customers in a challenging time.

Chenault summarizes his leadership philosophy as, “innovate or die,” akin to Dr. Deming’s famous quote, “It is not necessary to change. Survival is not mandatory.” Chenault tells his organization, “We must become the company that will put ourselves out of business before someone else does. We must constantly challenge ourselves and evolve to do so within the context of our values.” Amex continues to innovate with programs like Small Business Saturday and payment partnerships with fitness tracker Jawbone Up, Airbnb, and New York City taxis. Today’s environment presents its own unique set of challenges, but we’ve seen Chenault thrive in times of change with a focus on compassionate leadership and innovation.

When Execution Matters More than Ever

Toby Cosgrove on the Centrality of Patient Experience to Healthcare

For Toby Cosgrove, President and CEO of Cleveland Clinic, a value-based healthcare system prioritizes high efficiency and great patient experience: quick recovery, loyal patients, and few medical errors. Under Cosgrove’s leadership, Cleveland Clinic, which conducts 5.1 million patient visits per year and employs over 3,000 physicians and scientists, has continued its 21-year streak as one of America’s top five hospitals

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Cosgrove leads with the mantra “patients first;” he even distributed nearly 40,000 buttons with that expression to hospital staff on his first day. In 2013, Patient satisfaction scores reached the 92nd percentile. Cleveland Clinic achieved this level of quality by first conducting a robust analysis of patients’ experiences and concerns to understand how it could create the best clinical, physical, and emotional patient experience. Another driver of Cleveland Clinic’s success is its reliance on direct measures of the organization’s goals, from emergency department wait times to employee weight loss under its wellness program. Cosgrove notes that “physicians are an incredibly data-driven group… you present the data and that makes the case for you.”

Under Cosgrove’s leadership, Cleveland Clinic has sought physicians who succeed in an environment that’s centered on the patient experience. Unlike other healthcare systems, Cleveland Clinic offers no tenure or financial incentives for doctors to perform unnecessary tasks and procedures. They prioritize quality, safety, and patient satisfaction. In addition, by creating strong communication throughout its system – which includes facilities, employees, and programs across numerous disciplines and geographies – Cleveland Clinic exceeds high standards for value and patient experience. In a 2014 interview, Cosgrove discusses the criticality of IT infrastructure for how Cleveland Clinic operates: “the data helps us take better care of patients,” he says.

Today’s healthcare providers face the challenge of doing more with less, but Cosgrove sees this as an opportunity, not a burden. At Cleveland Clinic, Cosgrove explains, “we work as a unit to reduce errors, improve safety, and work more efficiently. And if something doesn’t work, we try something else until we get it right.” This approach demonstrates Dr. Deming’s relentless commitment to constant improvement – which is especially critical in to healthcare, where performance means lives saved.


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