Much of the success of American Express during the mid 1980s was attributed to the entrepreneurial management philosophy of Lou Gerstner, chairman of American Express TRS. He himself indicated that it was not his original intent to come in to American Express and institute corporate entrepreneurship. Nonetheless, his background and management style seemed to challenge the people who were already there and developed into something that was considered entrepreneurial, or intrapreneurial.
American Express Company was an appropriate venue for this kind of management. During the late 1970s, as an organization, it set aggressive goals for itself. Rather than accept static growth, or attempt a defensive posture in the face of growing competition, American Express TRS decided to emphasize growth in earnings and high ROE, while at the same time not damaging the larger organization. During the early and mid 1980s, TRS was able to achieve, and surpass, its financial goals, primarily by emphasizing its entrepreneurial spirit and constantly generating new products, services, and marketing efforts. By the mid 1980s, however, there was the new challenge of maintaining this rate of growth, and the entrepreneurial spirit. The financial services industry was quite volatile and competing card services were also being aggressively marketed.
Gerstner's philosophy, however, was that American Express was going to have growth and that it was going to pursue growth aggressively. His management style initially conflicted with how things had always been done at American Express and he had to ease off a little bit. Nonetheless, his basic management style was focused on creativity and informal problem solving and he was interested in changing the organization so that it could respond to new needs more rapidly and effectively. He was surprised by the depth of resistance within the organization structure and indicated that it took longer than he had...