Review by James Brewer
Insurance? Amazing! That is a chapter heading in a just-published book by Henry Engelhardt, a founder of one of the most successful insurance enterprises to be launched in the late 20th century. Engelhardt was one of originally a very small team who drove Admiral Group to become the largest private motor insurer in the UK. Admiral started at Lloyd’s but is now headquartered in Cardiff and the only FTSE 100 company in Wales.
Admiral along the way had to overcome a few bumps in the road that were not so “amazing,” but Henry helped take it in three decades to a company valued at £10bn, with an international dimension and employing 10,000 people. He was chief executive from joining Admiral in June 1991 until his semi-retirement in May 2016 to become Admiral plc’s CEO emeritus.
Now he sets out his manual of often-contrarian maxims that attests to his ability to create and get the most out of a ‘happy’ team of co-workers. While there is no doubt that the world of commerce has a powerful hold on him, he avers that business leaders must steer clear of being selfish: a big mistake that is just self-defeating, as he sees it.
In Be a Better Boss: Learn to build great teams and lead any organization to success, he offers copious advice learned through sometimes painful experiences. “On numerous occasions in the first five years, I went home thinking I had just spent my last day at Admiral – I was either going to quit or get sacked.”
His jaunty narrative is part of an exhortation for improved leadership and management in all organisations: from multinationals to start-ups, from private companies to the public sector. There seems to be a clear need for that: in May 2023, the online news site Continuity Insurance & Risk reported that the number of UK chief executives of FTSE 350 companies resigning from their posts doubled in 2022, as businesses faced sluggish financial growth and difficult EU regulations. This was unsurprising, given the impacts of the Covid-19 pandemic and the conflict in Ukraine, but in a comment on the findings, David Duffy, chief executive of the Corporate Governance Institute, said: “The role of the CEO has become even more crucial They must be able to inspire and effectively oversee employees while also ensuring the company is staying ahead of competition by adapting to changes in the market. They must also be prepared to make difficult decisions, such as reducing expenses or letting go of personnel to guarantee corporate financial success.”
Henry Engelhardt elaborates on a persuasive message that “being a good boss is not only good for all those around you, but organisations will get better results as well.” This challenge has worked for him: the Sunday Times Rich List estimates that he and his wife Diane are worth £863m.
His philosophy is drawn from almost 50 years’ working experience, starting at the age of 13 as a salesboy for Poochie’s Hot Dogs in a Chicago suburb. He earned a BA in journalism and radio, television and film from the University of Michigan, and an MBA from INSEAD (European Institute of Business Administration’), a non-profit, private business school headquartered at Fontainebleau, 60 km from Paris.
After a spell as a management consultant, his decisive career switch was to become the first marketing and sales manager for Churchill Insurance, which was founded in 1989 as part of the Direct Line group and as one of the UK’s first car insurance companies to cut out intermediaries. The market was changing rapidly, from face-to-face sales to telephone sales. He quickly found out that car insurance was “an amazing business.” He marvelled: “How many products [in other sectors] have a different price for every customer?”
After Churchill’s initial success, it was clear that many big insurers and some other organisations were looking to sell car insurance direct to the public. Engelhardt was surprised to get a call from a management search firm and “a bit perplexed” to hear that it was because a managing agent at Lloyd’s called Hayter Brockbank (later renamed the Brockbank Group) was attempting to lure him. First question he asked himself: what in the world was a managing agent at Lloyd’s?
He soon learned that the Lloyd’s structure was akin to that of the Chicago Mercantile Exchange, where he had worked for a while as a ‘runner.’ The CME had traders in the pit, and Lloyd’s too was a marketplace, for underwriters, who were grouped into syndicates and worked under a managing agent.
“One cheeky thing I did before I was hired was the key to the future of Admiral. I asked for an equity stake in the business for me and my management team. This was the going thing at the time. I almost randomly picked a number and asked for a 25% stake for me and my team and was kind of shocked when they said OK. Suddenly writing a business plan became a lot more interesting.” The share was later reduced by the underwriting back office to 20%, but he and his colleagues were still excited – “We did cartwheels in the street all the way back to our office.”
It was not plain sailing though, and “we fought horrible battles in the early years, with the parent company and with some of the senior managers.” There was a bitter lawsuit filed by disaffected shareholders, and Lloyd’s was said to be not ready for the ‘revolution’ in the way he wanted to create a pricing department to set prices while the underwriting department would set the rules.
In November 1999, Engelhardt led a management buy-out of the Admiral Group from Brockbank, and in September 2004, Admiral floated on the London Stock Exchange.
Written in conversational but no-nonsense tones, much of this 304-page book is about building teams and working closely together. In January 1993 at the start of the Lloyd’s foray, “we were about as far away from that utopia [of harmony] as possible. But despite the tension and dysfunctionality of the management team the business went brilliantly. We were lucky to launch when we did. 1993 was God’s gift to insurers, especially for those with no history [of losses] to worry about. Prices had started going up in 1992, soared in 1993 and continued to rise into 1994. Rising prices mean people shop around more, which played in our favour.”
The successful start was not merely down to luck, he argues. Admiral chose a target market that appeared risky, but “that paid dividends early on and continues to pay dividends today.” In other words, they would not compete against other direct firms that sought ‘good drivers’ but would go for those who paid higher premiums – the premiums were higher because the risk was higher – generally younger city drivers and/or drivers of larger, more expensive cars. It turned out that this was a much-underserved part of the market, and such consumers responded well to targeted advertising.
“If people like what they do, they’ll do it better,” is one of Engelhardt’s core precepts, and his book provides many examples to turn this into management practice. He adds: “Through the years, I’ve constantly reminded myself that, as a manager, I’m always on stage. People will react to what you say or do, far more thank you think.” Beware, though: managers must keep their often-larger-than-life personalities in check.
At INSEAD (where he is now a frequent guest speaker at MBA classes) he learned “one of the best management lessons I ever had. The power of the team is invariably greater than the power of any single individual.” He was to distil this into a simple, memorable phrase: The Team, The Team, The Team. He borrowed that expression from a legendary American football coach.
Emblematic of that approach, almost every member of staff has shares in Admiral. When the business was floated, some 1.400 members of staff were given a total of nearly £60m ($100m at the time). He was to ensure that Admiral was what he calls an egalitarian company – no company cars, no company dining room, same chair and desk for all. “This all stemmed from my experiences at Churchill. Because that’s not the way they did it there.” Admiral is the only company that has consistently made the Sunday Times Best Companies to Work For list for the last 20 years.
At the same time, there is a warning. “Importantly, to be a people-oriented culture doesn’t equate to a soft company culture… Shoddy work won’t be accepted, but the managers must strive to create a cooperative, welcoming environment where team members won’t be afraid to put forward ideas.”
He advocates embracing a sense of professional playfulness. Admiral set up a ‘Ministry of Fun’, a series of events aimed at involving and entertaining employees.
Endorsements for the book include one from Louise O’Shea, ex-chief executive of Confused.com, the UK’s first “insurance aggregator” who says: “Not only do I give Be a Better Boss to everyone in Confused.com, but I give it to anyone I meet who is interested in being a better leader.”
A recent headline over an opinion piece in The Times read: “For chapter and verse on how to make money, avoid business books.” Henry Engelhardt’s tome, we submit, should be one of the few exceptions.
Be a Better Boss: Learn to build great teams and lead any organization to success. By Henry Engelhardt. Published by whitefox, £12.99. ISBN: 9781915635259. www.wearewhitefox.com
