‘A Rejection Of The Craziness:’ Ken Chenault On The Election, The Economy And The Empathy Needed In Job Cuts

Former American Express CEO Ken Chenault—who together with prior Merck CEO Ken Frazier led a campaign last year supporting voting rights—said Tuesday he was “encouraged” to see what in his view was “a rejection of the craziness that was in the political environment” in the recent midterm election’s results, while also sharing concerns that “we still have serious issues with respect to the threats to our democracy.”

Speaking at the Forbes Future of Work Summit Nov. 15 in New York, Chenault, who is also chairman and managing director of the venture capital firm General Catalyst and the lead director at Airbnb, called the efforts to deny 2020 election results “mind-boggling,” said there was “no doubt” Europe was already in a recession and did not mince words about tech leaders who make big job cuts with little show of concern for employees.

“I’ve got to tell you—the announcements coming out the last few weeks from [many] tech companies, they blame people for not working hard enough,” Chenault said, calling statements like that “bulls—t.” “It just doesn’t hold any water at all.”

Chenault did not name Elon Musk—who unceremoniously planned layoffs of half of Twitter’s workforce, initially ordered workers back to the office and brusquely told staff to decide in two days whether they wanted to be part of the new “hardcore” Twitter—but expressed a need for leaders to treat people as well as possible during job cuts.

“If you’re trying to build an enduring company—if you’re trying to build trust—your existing people are going to be looking at how you treat people who leave the company,” Chenault said to the room of human resources executives, CEOs and other executives gathered for the summit.

“They need to understand the emotional turmoil that you’re going through. ... What are you doing to help them? Not just with generous severance benefits, but how are you helping them find employment?” he said, noting how well he thought Airbnb CEO Brian Chesky communicated about layoffs early in the pandemic. “[Chesky] really spoke from both the head and the heart.”

But in other cases, “what is particularly discouraging is that the industries that should be on the forefront are the ones who are basically saying I don’t really care, because these people are expendable,” Chenault said.

Chenault, who was CEO of American Express from 2001-2018, made comparisons to the Great Recession, noting the liquidity crisis he had to manage. “We’re not even close to that at this point,” he said. “The reality is we’ve just been awash in capital. People are saying capital’s tight. When you were spending like a drunken sailor it may seem tight—it’s not tight yet.”

He sees an “inevitable” downturn in the U.S., and sees Europe as already being in one. “There’s no doubt they are in a recession,” Chenault said of the continent. “One of my concerns is that [in the U.S.] we’re going to meander. That frankly could be worse than having a sharp downturn [where] you know you’re hitting bottom and then you’re going back up. If we are going to meander and drift lower that sets us up, I think, for some real problems.”

“One of my concerns is that we’re going to meander. That frankly could be worse than having a sharp downturn [where] you’re hitting bottom and then you’re going back up.”

Asked if CEOs should be doing more to speak up about concerns over democratic systems in the U.S., Chenault noted that while he was trying to be nonpartisan, he was dismayed by efforts on the political right to deny the 2020 election results. The idea that “you had to take an oath to support a lie—that’s just mind-boggling,” he said, “that the truth didn’t matter.”

He continued: “In what company would you say to employees, ‘the way I’m going to promote leadership is they don’t have to tell the truth—they just need to show me some results and that’s all I care about.’ You wouldn’t put that type of person on a board. You wouldn’t allow that person to run a business. But yet with candidates and some of our elected officials, [people] said ‘that’s ok.’ ”

Still, while he has concerns, the midterm’s results “gave me more confidence in the American public,” he said. “I feel better about the prospects for our country because I think people did say ‘enough of this craziness.’ And I think that’s frankly more important than some of the politics.”

Chenault, one of a small number of Black executives to lead a large publicly traded company in the U.S., also cofounded a nonprofit initiative called OneTen that aims to get companies to hire more Black workers without college degrees into higher paying jobs, and suggested tech companies need to change how they think about pedigree when hiring people.

“One of the things I always say to a lot of my colleagues in venture and technology overall is ‘we all talk about innovation but the reality is the social pact between the worker and employer hasn’t changed at all,’ ” Chenault said. “In fact, I would say in the venture sector and the technology sector, they have some of the most antiquated views of the skills and capabilities you need to be successful.”

Chenault spoke at the Forbes summit with Euan Blair, founder and CEO of Multiverse, a startup that works with corporations to scale the number of apprenticeships they offer. (Professional apprenticeships in roles like software engineering or digital marketing provide paid on-the-job work and training at the same time as curriculum and are seen as an alternative route to entry-level hiring than college degrees.) Chenault’s firm, General Catalyst, is an investor in Multiverse, which is expanding in the U.S.

Blair, whose father is former prime minister Tony Blair, noted that while Black and white Americans join college with similar levels of debt, Black students leave college with twice as much because they don’t have the same resources to fall back on. He told attendees that when it comes to addressing racial equity through more skills-based hiring, “you can either let a group of college admissions officers determine the winners and losers in the labor market and never really question it—or you can look at facts, data, logic and fairness and decide instead actually there is a different way.”

Chenault says the issue will take both addressing prejudice and racism with implicit bias and diversity training, as well as making systemic changes, such as not requiring four-year degrees for jobs that don’t need them. “You knock out a significant portion of eligible Black workers when you impose requirements [like four-year degrees] that most can’t meet,” he said. There’s “this bizarre view that there’s a meritocracy. There’s not a meritocracy. ... I’m not talking about compromising standards and outputs. I’m saying you’ve got to change some of the rules.”