{"id":5195,"date":"2019-03-12T11:14:33","date_gmt":"2019-03-12T15:14:33","guid":{"rendered":"https:\/\/www.bu.edu\/questrom-magazine\/?page_id=5195"},"modified":"2019-06-03T13:40:24","modified_gmt":"2019-06-03T17:40:24","slug":"doug-buckminster-american-express","status":"publish","type":"page","link":"https:\/\/www.bu.edu\/questrom-magazine\/spring-2019\/doug-buckminster-american-express\/","title":{"rendered":"Old business, new world"},"content":{"rendered":"

It\u2019s a weekday morning, and you\u2019ve stopped at a coffee shop for your daily latte. When it\u2019s time to pay, will you take the hot cup in one hand, unzip your bag with the other, and pull out a wallet stuffed with cash and credit cards? Or will you use an app on your phone (which, let\u2019s be honest, is already out) and transfer the money straight from your bank account to the register?<\/span><\/p>\n

\n

\"\"<\/p>\n

Buckminster joined American Express in 1986 because he wanted to shape an organization\u2014not just help maintain one.<\/p>\n<\/div>\n

That\u2019s the kind of question that Doug Buckminster (BSBA\u201982) of American Express thinks about every day. That, and making sure the 150 customer emails he receives each week are answered. A one-time summer intern who\u2019s now group president of global consumer services, Buckminster has spent 33 years at the company, and still finds the job fresh and exciting.<\/p>\n

\u201cI\u2019m not sure there\u2019s ever been a time that\u2019s more dynamic than this one,\u201d says Buckminster<\/a>, who has seen the company through the fallout from airline bankruptcies, a merchant revolt, 9\/11, and what he describes as a \u201cdivorce\u201d from Costco in 2015. One of the latest challenges is the prodigious growth of new direct payment mobile apps like Venmo and Zelle, which market themselves as a credit card alternative (and in Venmo\u2019s case, tack a surcharge onto any transactions funded via credit card).<\/p>\n

Buckminster\u2019s take? Bring it on. Early in his career, he decided he wanted to play a role in shaping organizations, not maintaining them. And in his view, every setback offers someone\u2014from an intern to a top executive\u2014an opportunity to innovate.<\/p>\n

\u201cThese existential moments sharpen the focus,\u201d he says. \u201cAnd it\u2019s good to have that muscle, that ability to pick ourselves up and paint a picture of the future that\u2019s at least as compelling as the past.\u201d<\/p>\n

American Express might not be the first company that leaps to mind as an example of a dynamic organization. The firm, founded as a delivery service to the new American frontier by shipping magnates Henry Wells, William Fargo, and John Butterfield, celebrated its 168th birthday in 2018. Buckminster himself is a self-described \u201cvery rational guy\u201d whose first job out of Questrom was as a financial analyst with the defense contractor Raytheon. He liked the job, but quickly realized that the finance expert at a defense company was never going to play a significant role in shaping the product or the culture.<\/p>\n

\u201cI was always going to be ancillary to the product and their core business, because I wasn\u2019t an expert in satellite and communication technology,\u201d he says. \u201cI decided I needed a change.\u201d<\/p>\n

He went from Raytheon to graduate school, where a summer internship at American Express led to a full-time offer in the fall of 1986. The company was still dealing with the fallout from 1978\u2019s Airline Deregulation Act, which had sparked years of airline bankruptcies, each one forcing American Express\u2014with travel services as a core part of its brand\u2014to offer costly customer ticket refunds. As Buckminster developed an airline risk management strategy, he began considering how the company\u2019s lifestyle brand and reputation should adapt to a new era. It was a moment, Buckminster says, when he understood the forward-thinking approach that goes into building a long-term career.<\/p>\n

\u201cWhen I started, our CEO, Lou Gerstner, used to give a speech that said, \u2018Come in, put your head down, do your job way better than anyone else has done that job, and things will work out for you,\u2019\u201d Buckminster says. \u201cThere\u2019s an element of that that\u2019s still true, but I think that\u2019s table stakes. People who are really successful take control of their own career. The modern corporation doesn\u2019t orchestrate their movement.\u201d<\/p>\n

In Buckminster\u2019s case, that realization led him from airline risk management to helping develop the company\u2019s first proprietary risk management technology, and then a position as chief credit officer for international business. A general management role took him to Latin America, Canada, the United Kingdom, and then back to New York. Today, he\u2019s still wrestling with risk\u2014particularly when it comes to fraud\u2014but also with the opportunities and challenges thrown up by digital and mobile products.<\/p>\n

During his tenure with American Express, the company\u2019s reputation has had high moments (the ubiquitous \u201cDon\u2019t Leave Home Without It\u201d ad campaign, played out to great effect in popular culture for several decades from its inception in the mid-1970s) and low (1991\u2019s \u201cBoston Fee Party,\u201d when a group of New England restaurateurs banded together and refused to accept American Express cards unless the company restructured its exclusive merchant discount pricing). But the ups and downs of the prior century are nothing compared to the pulse-paced fluctuations of this one.<\/p>\n

The 2008 financial crisis left consumers wary of financial services companies, a feeling fueled by increasingly frequent data thefts at major retailers. Meanwhile, with mobile technology, early-adopting consumers can envision a world where they don\u2019t need credit cards at all.<\/p>\n

Buckminster, a member of Questrom\u2019s Dean\u2019s Advisory Board, says the old, established brands and the people that run them need to take a hard look at the entire organization, from the consumer product to the corporate culture, and help them adapt to survive.<\/p>\n

\u201cIn the last 20 years, we\u2019ve had a number of events, firm-specific or secular, that have caused us to reinvent ourselves,\u201d he says. \u201cThe imperative is to adjust and adapt, to remain relevant.\u201d<\/p>\n

American Express intends to stay the same brand it has been for decades: a financial-services company with a lifestyle focus and customers who \u201ccan count on that company to always have their back,\u201d according to Buckminster. But is that what the latest generation of consumers wants?<\/p>\n

\u201cThat\u2019s what I get pushed on by investors, analysts, and colleagues more than anything,\u201d Buckminster says. \u201cIt\u2019s a source of great energy and paranoia for us on an ongoing basis.\u201d<\/p>\n

\n

\"\"<\/p>\n

Buckminster says there was too much deference for experience when he joined American Express; now, good ideas can come from every level of the organization.<\/p>\n<\/div>\n

Some of the solutions are clear: develop technology that lets clients enroll and manage accounts from mobile phones, and offer partnership incentives beyond the traditional airline miles model, like discounted rides with Uber. To stay competitive, American Express has recently acquired some smaller tech companies that specialize in offering travel and dining assistance using AI-powered, chat-based interactions from a mobile phone. It\u2019s a new development that both aligns with the classic American Express brand, Buckminster says, and attracts mobile-centric consumers who might otherwise choose a direct payment app or another card.<\/p>\n

To help American Express maintain a strong presence in the market, Buckminster has relied on a different lesson he took away from his first job at Raytheon. \u201cCompany culture,\u201d he says, \u201ctakes on the characteristic of its largest customers.\u201d<\/p>\n

For the latter part of the last century, the American Express culture reflected old-school trappings of luxury\u2014what Buckminster calls \u201cthe yacht, private jet connotation.\u201d Now, he says, with a new generation rapidly becoming a powerful force in the boardroom and in the marketplace, it\u2019s an interest in the company\u2019s ethics and beliefs, and a desire to solve social problems.<\/p>\n

\u201cThere\u2019s an expectation, now, that the company is going to have a point of view, and it\u2019s not going to be about next quarter\u2019s earnings per share,\u201d he says. \u201cThe current generation of colleagues asks, \u2018What is our purpose?\u2019\u201d<\/p>\n

Buckminster and his team have started to answer that question. In a partnership with Parley for the Oceans<\/a>, a nonprofit specializing in reducing plastic pollution throughout the world\u2019s oceans, American Express has pledged to reduce single-use plastics in its corporate offices, and has already phased out their use in the company\u2019s Centurion airport lounges around the world. Consumers have their own opportunity to get involved in the collaboration: a new Ocean Plastic card<\/a>, manufactured with upcycled marine debris, is scheduled for rollout late in 2019.<\/p>\n

The company has also moved away from the office charity drives Buckminster remembers from his early days, and now offers employees many opportunities to volunteer, including with the Strive for College<\/a> program, which partners students with adult mentors who walk them through the college application and financial aid process.<\/p>\n

\u201cThe old rules don\u2019t apply, and technology and facility with it accelerates the ability of young professionals to have an impact.\u201d<\/span><\/p><\/blockquote>\n

The company\u2019s drive to make an impact is part of what Buckminster says is one of the biggest and most necessary changes he and other longtime company execs have undertaken: an upending of the rank-and-seniority model. \u201cWhen I was starting out, there was way too much deference for experience level, seniority, and tenure,\u201d he says. \u201cThat\u2019s changed substantially, brought about by a range of new companies being run by very young folks. The old rules don\u2019t apply, and technology and facility with it accelerates the ability of young professionals to have an impact.\u201d<\/p>\n

American Express has had to shift assumptions about who and what offers the greatest value. Mezi<\/a> and Cake, for example, the two lifestyle start-ups acquired by American Express last year, were only a few years old with a handful of employees; previous acquisitions were more likely to have decades of history and hundreds of workers. Bringing on the two start-ups\u2014Mezi offers a virtual travel assistant, Cake, financial technologies\u2014Buckminster says, meant changing how the established business approached integrating the younger ones.<\/p>\n

\u201cIt\u2019s a totally different dynamic,\u201d says Buckminster of the changes he\u2019s seen at American Express, \u201cbut rewarding. Every year, I learn a ton I didn\u2019t know before.<\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s a weekday morning, and you\u2019ve stopped at a coffee shop for your daily latte. When it\u2019s time to pay, will you take the hot cup in one hand, unzip your bag with the other, and pull out a wallet stuffed with cash and credit cards? 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