At the recent Sanford Bernstein Conference, American Express CEO, commented on the company’s Corporate Portfolio Management efforts (Investment Optimization) in his address as the conference. Chennault commented, “We’re also raising the overall return we generate on our investments, a process we refer to as Investment Optimization (IO). While we always required our investments to achieve certain hurdle rates, we’ve now implemented a far more disciplined process. Investments are thoroughly assessed and prioritized based on strategic impact, return, risk and
payback period. Once approved and executed, we then apply a detailed follow-up process to
ensure the investment actually generates the returns we expected. As with Balance Sheet
optimization, our goal with IO is balance.

Growth requires risk — it’s a fact of doing business. But with the improvements we’ve made,
we’re now better able to balance our tradeoffs and make decisions that will sustain, and
hopefully maximize, our returns over a longer time horizon.”

To request Ken Chennault’s comments at the Sanford Bernstein conference in which he discusses Investment Optimization, you can request them by clicking here and it will be sent to you.

 

 

In a recent study entitled “Finance Under Pressure: How Innovative CFOs Do More with Less”, American Express’ Corporate Portfolio Management effort was highlighted as a practice that enables finance to focus on more value-added activities such as Investment Optimization.

To request the study, please request it by clicking here.