Someone's knocking at the door: Kenneth Chenault's appointment as president and COO of American Express threatens to shatter one of the final barriers to corporate America's top spot.

A WORLD OF GLASS CEILINGS and sticky floors. That's how one observer describes the corporate arena as African Americans have tried innumerable times, without success, to break into the very upper echelon of corporate management. In 1988, BLACK ENTERPRISE first posed the question, "Who will be the first Black CEO of a Fortune 500 company?" With a field crowded with worthy contenders poised to grasp the brass ring, it seemed like a response wouldn't be long in coming. But nearly a decade later, there's still no definitive answer.

A serious contender has emerged from a field of deserving candidates. Ken Chenault's recent appointment as president and chief operating officer of American Express Corp. places him within a hair's breadth of becoming the first African American to run one of the largest firms in the country. With revenues of $15.8 billion in 1996, American Express was recently ranked by Forbes magazine as the 65th largest enterprise in the U.S. Chenault's steady ascendancy marks a potential watershed moment illustrating how far African Americans can actually climb up the corporate ladder.

"There have been a number of people before and after me who clearly possess the capabilities to run a large firm," says Chenault. "That's why it's so important to look at me not as an exception but rather as someone who was given the opportunity to succeed."

Not surprisingly, Chenault's designation as CEO-in-waiting is being hailed by other African Americans in the CEO pipeline as deserving and long overdue. Much more than an individual achievement for the Harvard Business School grad, the appointment is seen as affirmation that given the chance, African Americans are willing and able to take the lead and successfully run billion-dollar corporations.

"Ken got on at the first stop of the train and is at the threshold of riding through to the end of the line," says Time Warner President Richard Parsons, who is one of a chosen few within reach of a CEO chair. "But he did not get where he is by accident or some secret pathway," adds Parsons. "He started this run several years ago. The important thing is you have to start with one breaking down that door."

Many have remarked that American Express Chairman and CEO Harvey Golub's selection of Chenault as the primary internal candidate for the top spot in seven years, when he retires, was unusual in its candor and forward thinking. But Golub's adulation of Chenault was nothing short of glowing as he praised him for spearheading a number of initiatives at the company over his 16-year career. Among them are his efforts to segment American Express's charge card business, expand the credit card and other consumer lending businesses, increase merchant coverage and reengineer other key business programs. "Ken has played a major role in building confidence in American Express, both inside and outside the company,' says Golub. "This move clearly recognizes Ken as the No. 2 executive in the company and the primary internal candidate to succeed me when the time comes."

But with the instability that comes with a competitive corporate environment, seven years can be a lifetime. And while Chenault seems perched now, no one has handed him the key to the castle yet. The corridors of corporate America are littered with one-time up-and-coming star executives who, for myriad reasons, never made it to the head chair they seemed destined for. Whether it was Bob Holland's abrupt tenure at Ben & Jerry's, or Dennis Hightower's hasty resignation from Disney, the last hurdles have been the most difficult to overcome.

In fact, it was almost 10 years ago that an African American was last poised to take the helm of a Fortune 500 firm. Jerry O. Williams, then president and COO of AM International, was hailed as one of the "25 Most Powerful Black Executives in Corporate America" by BE in 1988. Indeed, Williams received much of the same accolades as Chenault from then chairman and CEO Merle H. Banta: "If I leave, he [Williams] is my successor," Banta declared, thus setting the stage for Williams to one day lead the then $1.2 billion graphics equipment company. But just months later, when Williams and Banta did not see eye-to-eye on the company's future direction, he resigned.

Besides Chenault, there are others who might one day claim the CEO seat. There's Richard D. Nanula, president of Disney Stores Worldwide, Walt Disney's retailing arm. Or perhaps A. Barry Rand, president of Xerox's U.S Marketing Group, another often-mentioned candidate. Regardless of who or when, optimistic onlookers say breaking the CEO barrier is inevitable.

"If it's not Kenny, it will be someone else," says Parsons. "And anytime there is a pioneer that breaks through first, there are other people that will pile in behind him once someone creates a new paradigm. Once you become aware that something is an achievable objective, then you become emboldened to try," he adds.

For his part, Chenault has generally downplayed race as a factor during his long tenure at the company. Yet he acknowledges a spotlight will be placed more firmly on him now. "With American Express being a large publicly held company, I would be scrutinized under any circumstance. If you don't enhance shareholder value, it doesn't matter who you are, you will have a problem," he says. "But there is no doubt that in some sectors of corporate America, people will be looking. And if I do well, I would be very hopeful that would encourage other companies to give people the opportunity to succeed."

Indeed, with the rash of reported racial discrimination cases that have hit the courts in recent months (see "Corporate America's Black Eye," April 1997) many diversity experts have seen increased minority participation at the upper echelons of the corporate structure as one of the surest means to achieving a bias-free workplace. If nothing else, leaping the CEO hurdle could send a clear directive that the time has come for yet another barrier to fall.

"When that obstacle is broken and you have an African American who is the CEO of a Fortune 500 company, the message to corporate America will be that we can do an outstanding job when these selections are made," says Howard University Business School Interim Dean Barron Harvey. "To the black community, this will ignite hope and desire. It's never been that we can't handle these positions but rather have been denied access. And when that day comes, it will be a great day. I just hope it comes soon."

Others are watching Chenault carefully. While he plays down the role of trailblazer, many say his rise can only help those who seek to follow him up the ladder.

"His appointment signals what the possibilities are for African Americans," says David Hinds, president of the Executive Leadership Council. The council, whose members include Chenault and Kraft Foods President Ann Fudge, provides African American senior executives of Fortune 500 companies with a professional network and forum on business and public policy issues.

"There always has to be a first, then a second and third," says Hinds. "But breaking that barrier and being first is always the most difficult. His appointment can only help pave the way for others."

Ann Fudge, president of Maxwell House Coffee Co., and the first black woman to permeate corporate America's top tier, agrees wholeheartedly. Interviewed for BE's 25th Anniversary Issue, Fudge said at the time that if large corporations wanted to outdistance their competitors, they would have to open the executive doors to African Americans. "All of this corporate reengineering has forced people to look at their performers with a lot more scrutiny. That gives talented people--regardless of their race or gender--an opportunity to make an impression, the kind that counts when it's time to see who moves up.

"We're in this race like everybody else, and everybody's not going to win," said Fudge. "But when that first break-through is made, it'll be terrific for a lot of reasons, and largely because I'll know what they had to go through to get there."

ON THE EXPRESS TRACK

If Chenault is to ascend to the CEO's chair in the next several years, then his advancement will depend heavily on how well American Express fares over the same time frame. According to sources, Chenault has his work cut out for him.

Earlier this year, the company announced it would be laying off 5% of its workforce and taking a restructuring charge of $125 million, largely because American Express has sustained heavy hits from competitors such as Visa and MasterCard over the last several years. Its share of total U.S. card transactions slipped from 22.9% in 1990 to 15.9% last year. And most of its lost business went to Visa, which now has 10 cards in circulation in the U.S. for every AmEx card. m American Express is currently going head-to-head with Visa and MasterCard as it attempts to forge links with U.S. banks in the distribution of AmEx cards. The vast majority of banks are already in binding agreements with Visa and MasterCard and are prohibited from shopping AmEx. But the Justice Department is currently investigating whether the binding terms violate U.S. competition rules. If successful, Chenault and American Express could rapidly regain lost ground and court a larger share of the charge card market.

"That battle will be extremely critical to the long-term success of improving the merchant network system of American Express," says Robert Hottensen Jr., an analyst with Goldman Sachs. He adds that there are a number of initiatives that the company has to tackle, including the implementation of broader charge card line. "They were extremely slow to jump on board with this. Until a few years ago, they only had three cards when Visa and MasterCard were segmented into a thousand market segments," he says. Another task is for the company to continue expanding internationally. There's tremendous growth potential in the charge card market worldwide, Hottensen says, "and American Express is one of the few global companies with an international brand name and global infrastructure. They must continue to grow outside of the U.S."

Chenault must be a main player if the company is to outpace its competitors, Hottensen warns: "He will play an increasingly larger role in the execution of the initiatives American Express has planned. He will also take a larger share of the credit or bigger share of the blame depending on how those initiatives work out."

For his part, Chenault realizes the heat is on, saying that those growth initiatives will require increased coordination and hands-on management at the most senior level of the company. "As President and COO, part of my job is to provide management and an integrated approach that is needed to execute our strategy. I must play a major role in the cross unit coordination because that will be critical for the success of our growth strategies."

James Parham, dean of the Hampton University School of Business, says American Express should be commended for ignoring stereotypes and choosing the best person for the job. And while one appointment alone does not signal a change in corporate culture, it can ignite a chain of events. "It starts a standard and something to be emulated," says Parham. "Someone like Chenault breaking that mythical barrier to the inner sanctum would finally show companies that competency and excellence has nothing to do with race or gender."

In fact, Parham likens Chenault's potential appointment to Jackie Robinson's breaking into baseball's major league's in 1947. Robinson, who ironically is being honored throughout this baseball season on the 50th anniversary of his joining the majors, changed the face of sports and society forever. Parham believes the CEO barrier is just as significant.

"With Jackie Robinson, someone had to say to hell with the repercussions--I want the best player on my team," says Parham. "That's how Robinson got in. That's how a CEO will break through."