Profile: David Howden

When I go to a tall new office building for a meeting I always plan to arrive with plenty of spare time so I can navigate any unexpected extra security checks (such as having my photo taken), reception system teething troubles (often involving how to spell my surname) or simply finding the right set of elevators for the floor I want (easily the most common cause of delay).

It turned out that One Creechurch Place, Hyperion’s new home in the heart of the London insurance market, was very efficient and well managed. So it was I found myself sitting in reception 10 minutes early for my interview with David Howden.

You can tell a lot about a business by sitting in reception and keeping your eyes open. From my 10-minute sample, Hyperion is an exceedingly busy place.

This is perhaps understandable as it is the first time the group has been able to house all of its business units – retail broker Howden, wholesale and reinsurance intermediary RKH, MGA Dual and now its new tech venture, Hyperion X – in the same building. They are on multiple consecutive floors of the state-of-the art building, joined together by a central spiral staircase.

Clients, suppliers, brokers, underwriters and support staff bustle hither and thither with purpose and energy. There are a lot of quite animated conversations happening.

However, what suddenly hits me is the realisation that there are almost always smiles on the faces of the people doing the talking and listening. This looks like company culture in action.

Soon it is time to go into David’s office overlooking the City. We don’t have long so I am a little anxious that we might not have time to get enough material for an article. I needn’t have worried. If the reception area was bustling, a meeting with David is a whirlwind. He operates in a different dimension to the rest of us.

I realise I have located the source of the energy and buzz in the building. He is sitting opposite me, animating and emphasising conversational points at extraordinary speed – and with a smile on his face.

The same electrical charge should crackle off the pages that follow.

David Howden: First and foremost, we say we’re a people-first business. We have a number of key themes, it’s not just one. It’s partly the employee ownership. It’s partly the model that we built around having a business that was very much about not liking centralisation. And a truly diverse management team, where we really believe that managers are leaders and not micro-managers.

At a conference we had a few weeks ago for some of our global leaders, I said: “Any of you who have read management books on how to manage, I think you should put them in the bin. I’m not sure that any of what they would try to teach you is actually what makes a good manager and leader at Hyperion.”

It’s about empowerment and an owner’s mindset and owning your decisions. I often say: “It doesn’t really matter what the decision is, just make a decision, learn from it and move on.”

I think that creates a whole environment around empowerment, around trust, around collaboration, around alignment, around the idea that we are stronger together.

We are also fiercely independent, but it is not something that we take for granted – we need to continue to earn the right to remain independent. We don’t issue dividends to shareholders. Everything is reinvested in the business. Our shareholders and investors support this strategy completely and independence is enshrined in our shareholders’ agreement. In a nutshell, the group cannot be consolidated.

Culture is the most valuable thing we have, and we try and retain it, and build on it, and see people come into it. To come and work here, you’ll be respected, you may well be an owner, or you may well have the chance to become an owner.

But whatever it is, you’ll be an individual, you’ll be able to make decisions, you’ll be empowered to do stuff. We like standardisation but we don’t like centralisation.

David Howden: We’re not a federation. If you get people running off doing anything they like there’s no value from being part of a group.

Let’s take Dual for example. At Dual we have lots of standardised things. We have standardised capacity, we have great bind-and-quote systems, we’ve got the shared service centre in India for processing. We have branding, we have shared brokers. So where it creates value for the business, we love to support people. And it’ll always be plug and play.

Our message to really good talent is to come and join us – we’ll give you the branding, the support, everything you need, but we won’t micro-manage the way you run your business.

Best practice, best process, best expertise – that’s what I mean by standardisation. But it’s very different from centralisation.

I often say to people: “If you like it somewhere else, you may not love it here.” Some people quite like to have clear rules and regulations and know exactly what they can and can’t do, and others prefer a slightly more grey area, and it’s horses for courses.

David Howden: I think fundamentally we have to ask ourselves if we think culturally the business is going to fit.

It doesn’t mean it’s identical to us, because it’s not always identical. But take the big one – RKH. We’d be nuts to have done that if we’d thought that would have created a massive tension in the business.

You look at that now four years on and we really have assimilated the cultures, assimilated the people, we’ve developed a business together, and that was because fundamentally, they were similar.

They were owner-managed businesses, they were quite entrepreneurial and they ran a model where they were experts at what they did. They weren’t identical, but they had enough in common.

If you look at a business where it’s very different from us – for example, it’s a corporatised business where the management wants to sell out – that’s not for us.

But if you’ve got an entrepreneur who’s grown a business a certain size, but now has difficulty in getting next level – be it through better technology, better products, or access to international markets – then that’s going to be a better cultural fit with us.

We’ve tended to know them, as well. They haven’t come from an investment banker saying: “Oh, do you want to buy Joe Smith insurance brokers in Kathmandu?” They tend to be people we’re trading with already.

David Howden: We’ve only just started. I don’t think it’s about the size. In a funny way, a sustainable business model with employee ownership at the heart of it almost works better at a larger level. In fact, we are committed to broadening even further our employee shareholder base.

When you think about it, with small brokers, where there are two or three employees, what tends to happen is they either full-on fall out and hate each other, or one of them wants to retire or another gets divorced and they therefore have to sell the business.

So I think the spread of risk among a much broader base of shareholders is actually easier to sustain.

And secondly, if you look at the capital markets today, as we build our business, I can quite comfortably see a business with tens of billions of valuation being supported by long-term capital. We attracted Caisse de dépôt et placement du Québec in, because a lot of the really long-term investors need really big investments. I don’t think the runway will ever end.

David Howden: There are two things, really, going on, and they’re well-encapsulated in Lloyd’s CEO John Neal’s Future at Lloyd’s document. The most positive element of the document is the focus on talent, and the diversity of talent.

And I’m not just talking about sexual diversity, gender diversity or ethnicity. I’m talking about the need for a diverse group of people in insurance if we’re going to really be the survivors and the thrivers in the next 25 years.

We absolutely need to be attracting the people that think: “Oh, should I work for Amazon, Google, Uber, or Hyperion? Or Lloyd’s?”

It’s not a soft strategy. If you look after the people, and they feel empowered, you’ll get good people, and you’ll get good results, and they’ll look after the clients. And if we can do that in a broader sense, in this market, if we can attract the brightest from all walks of life, then we’ll definitely thrive.

Conversely, if we end up having a small pool of people who don’t really understand where the business should be in 25 years’ time, then others will start to chip away at what should be our world.

David Howden: There is no smoke without fire. And I think all businesses in the London market should be absolutely pushing to get rid of any of the old smoke. Blow it away.

While there may be no smoke without fire, the fire is certainly not burning. We’ve changed – I’ve been in this market 37 years and it’s changed dramatically.

There are still pockets of badness, and we make sure that those who want to attract bright, talented, young diverse people are portraying an image that is absolutely vibrant – and world-leading.

Are we perfect? We’re certainly not. You look at our gender pay gap, it’s no better than average, which is not where we should be.

But rather than cry over the bad areas, let’s be positive leaders and say: “That’s an old market. It’s not what we’re like today.” We’re going to do that positively and we have recently launched in the UK a campaign, which we asked the employees to lead, called RESPECT, which is all about driving through an inclusive culture that allows all colleagues to feel respected and valued. It is so important to embrace a bottom-up approach and not just from the top down.

David Howden: It has to be. You’ve got to lead by example. You’ve got to be able to say to people who want to come and join the business: “These are our standards, and we will apply them across the board.” If you don’t do that, and you’re seen to have a chink in the armour, then the whole thing’s gone down.

David Howden: Exactly that. Long maternity leave. And also flexible working. If you think about the way we work today, why couldn’t we be flexible? Why do we need to tell people how many holidays they can have, or what hours they’ve got to work?

Ultimately, you tend to know who is delivering and who’s not. I come back to an empowering, trusting business.

There’s another thing, which is understanding as a business the real value of diversity, because I think when it’s a tick-box thing, it doesn’t happen.

You have to show why diversity builds a better business, and then people will actively do it.

David Howden: Poaching is an interesting word, isn’t it? It is a journalist’s term, it’s interesting because it suggests that people belong to the companies.

That is not the case. They do not belong to the companies. I’m an owner of a company, and I love my people, but it is my duty to make them want to work at Hyperion.

If they cease to want to work at Hyperion and want to go and work somewhere else, they have not been poached from me, I have lost them.

It is my fault – it’s on me and my managers. You cannot poach human beings.

But I think you’ve got a point that in attracting talent, you must do it in a way that has good ethical foundations.

There is a question mark over what is ethical practice and what is not, but that’s very different from poaching staff. The industry needs to be very clear that the outside world is looking on. It’s rather unfortunate that sometimes, we end up having our dirty laundry out there waving in the wind, and I’m sure the whiff to others outside our industry is not great.

I’m absolutely open to talent, but I want it to come and join me in an ethical way. Just as I would want those who leave me to leave me in an ethical way.

David Howden: I would always put the people first but I think embracing technology is very important. We’ve got to change, both in the delivery of the product and the cost of delivery of the product.

But there’s no good telling a business they’ve got to do it. You can’t go along and take away someone’s profit margins, or require them to dramatically foul all their business. You’ve got to deliver the solutions that allow them to run their business successfully and the only way we’re going to do that is by embracing digitalisation and technology and data.

If you look at some other industries, they’ve done it very successfully and much faster than us. If you look at what asset managers are now charging, it’s not even half what they used to charge, but 10% of their old cost. But their margins are about the same. Why? Because they embraced what they needed to do. To me, it’s an absolute must.

And that brings us back again to the talent pool. We need the people who can help us do that and understand it and explain it to people, because if we don’t have the right people, it’s not going to happen.

I think the launch of Hyperion X will be the biggest change in our business since the acquisition of RKH or the launch of Dual. These will be the three turbo chargers of the last 25 years.

David Howden: First and foremost, the focus on talent, because I think that really is important. I love the fact that’s there, and that’s really key, to me.

Secondly, I love the ambition of it. Clearly, there’s going to be a lot of naysayers out there, questioning whether it can be delivered. At least set out to be ambitious – if don’t set your bar high, you won’t get anywhere.

I also like the clarity of what would make a great Lloyd’s. If you could create, in a reasonable time-frame, a Lloyd’s that could do all those things, it would be a very powerful vehicle, because no one would say that it wouldn’t be good to reduce the cost of delivery of product.

But you’ve got to have the way of reducing that cost before you force people to reduce their revenue take. You’re not going to do it just by slashing it. It’s not going to happen.

It’s the first time that the market has felt there is a plan out there about which they can say: “You know what? I’d like to be part of that drive and that success.” Good luck to them!

This article was first published in the Summer 2019 issue of Insider Quarterly