Mikolaj Piskorski: Hi I'm Mikolaj Piskorski. I'm a professor at Harvard Business School. And I'm joining today by Ed Gilligan, who is the president of American Express. Thanks for joining me.
Ed Gilligan: My pleasure, Mikolaj.
Mikolaj Piskorski: So let's just start with four years ago, when you actually came back from London to New York. And you saw a company that was just emerging from a recessionary period. What did you see when it came to innovation?
Ed Gilligan: Well, it was a fascinating time, when I look back now. We went through a lot of soul-searching. And as the end of 2009 and 2010 progressed, a couple of things became clear to me. One is that our consumers were resilient and were starting to bounce back. So the recession didn't seem to have a long-lasting impact on consumer behavior. But it also was clear to me that other things were impacting behavior that I probably hadn't seen at the time.
During those years of the recession, most companies around the world were playing defense, as certainly we were – restructuring, reengineering, reducing costs, changing how we fund the balance sheet, etc. But at the same time, not every company was playing defense. When the real estate bubble started bursting in the U.S., which was the first phase of the recession, Facebook had 100,000 members, Apple didn't have a phone yet. Three or four years ago, that was obviously changing drastically, as social was taking hold across many different digital platforms, and the smartphone, particularly the iPhone, was changing behavior radically. And it wasn't the recession, but maybe it was the 10, 20, 30 billion apps being downloaded, and the internet in your pocket, that was changing the game for us.
Mikolaj Piskorski: So this is a really big transfer for American Express, to actually catch up with these environments. So what were some of the concrete things that you did to actually change the organization to point you in that direction?
Ed Gilligan: It was really starting small, and changing the scorecard of the measures of success, and getting literally handfuls of people together who have that look in their eye that they want to do something different -- they're a little bit less worried about what their next job is in their career, and they're more worried about, “ How can we make an impact? How can we do something cool? How can we be the first in the industry?” And it was like a snowball going downhill that start small, but then it gains momentum.
And I remember now, we're cutting to the end of October of 2010. I was in a business review with our people who run OPEN, which is our brand that stands for small businesses. At the end of 2010, much of the U.S. economy was rebounding, but not small business. It was still kind of stuck in this recession, very cautious, jobs weren't being created, etc. And that business unit stands for something:” How do we help small businesses do more business?” That's their mission.
And they had come up with this concept four weeks before Thanksgiving of that year to create a day called Small Business Saturday. They had a very small modest budget. And they were telling this story to me, how they had this concept: “Let's get American consumers shopping small on that Saturday after Black Friday, before Cyber Monday.” It was three and a half weeks to go before it happened. And the lights went off. It was like a light shining on me, that this is the best idea I'd heard. It's an incredibly important part of the American economy that maybe we could impact.
And we had an authentic value proposition. We've had a business dedicated to small businesses since the 1980s here. So we had relevance. What we didn't have is, “How do we ramp this in three or four weeks?” And as I went down this road the next few days, kind of investigating, it was clear it wasn't going to be about launching a new television advertising campaign. It was going to be about leveraging social. We had used Facebook before that, but we had using it in very traditional ways. And that was clear we had to do something differently.
So we created a very small team that cut across a couple of different parts of the company. And I empowered them, gave them money, said how much trouble could they get in in three weeks, and got out of their way. And three weeks, that team ended up getting about 42 percent of Americans aware of Small Business Saturday and got millions of AmEx customers shopping small. We juiced it up with some merchants offers, but did everything digitally for the first time.
It was an integrated campaign. But what I learned is the power of getting small teams – flatten the organization. I had to learn a different way, so I wasn't going through business reviews every week with them, and “Show me your operating plan,” and “What are your measures of success?” I was getting out of their way and giving them air cover, and funding them in a lean startup kind of way. So after Small Business Saturday… And by the way, we've just run it for the third time last year, we're up to 75 percent of Americans being aware of it, and we think on that day over $5 billion of commerce occurred at small merchants this past year.
But then I took that same small-team concept – flatten the organization, get a handful of people who know what they're doing, and challenge them to now reinvent our value proposition -- and what came out of that are some really new, innovative ways of American Express adding value to card members and merchants alike, but leveraging platforms like Foursquare, Facebook, Twitter, Xbox; working with Apple and Passbook. We've done a series of things where every couple months, we're launching new products in weeks -- not months -- of development, and really doing industry innovation, and bringing what's unique about American Express to life. And it's been a great ride.
Mikolaj Piskorski: Well, that was great. Thank you very much for your time, Ed. I really appreciate it.
Ed Gilligan: My pleasure, Mikolaj. Thank you.