Get the people right or you will flounder

Peter Cullum, one of the judges for the Entrepreneur Challenge 2008, talks about what being entrepreneurial means to him

Doug Morrison / The Sunday Times
May 11, 2008

Peter Cullum formed Towergate Partnership in 2005 after a career in insurance. Under his chairmanship, Towergate has become Europe’s largest independently owned insurance intermediary, with sales of £2.5 billion and a workforce of 5,000. He recently created a centre of entrepreneurship at Cass Business School, providing £10m of “seed corn funding” there for budding entrepreneurs.

What is your entrepreneurial background?

We kicked off Towergate in 1997 and had our share of luck. Most of our growth was by acquiring other companies — in the past 10 years we have acquired more than 150 businesses. We are in a fairly traditional space and that made it easier in the sense that there wasn’t a lot of innovation. So our particular model worked far better than we could ever have imagined.

Why did you agree to become a judge?

I was a judge last year and I got the bug. I found it quite inspirational hearing other people’s stories, listening to how these guys, through all sorts of adversity, had created really successful businesses.

Why is the Entrepreneur Challenge important?

When a bank is offering £35m of interest-free money, you have to take that seriously.

It doesn’t happen very often.

Nearly half the workers in Britain are employed by businesses with fewer than 50 people, so enterprise and entrepreneurship are incredibly important to the economy. I believe successful business people in all spheres — small and large — do not get the recognition in the UK that is afforded their counterparts in America and other leading economies. My crusade is to get more recognition for successful entrepreneurs and I believe what Bank of Scotland Corporate is doing with The Sunday Times will help.

What will you look for in a competition entry?

Passion, vision and having real energy and focus. They are all good things, but in addition to that I am looking for a robust business plan. With most businesses there must be some form of differentiation. It’s a tough call to make a success out of simply doing what everybody else is doing because the sole criterion then becomes you do it cheaper. I am also looking for evidence of good execution. A lot of people have great ideas but maybe do not have the necessary skill. To an extent we need to improve the skills of entrepreneurs to help them become even more successful.

How important is networking to an entrepreneur?

Delving into my experience, we have made 150 acquisitions, more than one a month and much of that has come through networking. We know the market, we know the people and we keep in touch with them. A lot of people are picking up the telephone to us now and saying, can we have a conversation? That’s not because they have picked us out of the Yellow Pages, it’s because we have taken a lot of trouble to make sure we are keeping in touch with who we believe are key influencers in our marketplace.

Networking is fundamental to most businesses. There’s no time wasted on reconnaissance as far as I am concerned. And despite technology, the internet and the way the world is changing, I still think business is very people-orientated, especially in insurance. We can have the smartest technology the world has ever invented but if we don’t get the people right, we are going to flounder.

What makes a successful entrepreneur?

You’ve got to have a great idea, with legs. A lot of people have great ideas but they are not sustainable in a competitive environment.

It’s about great leadership skills, too. If you want a great company, you have to find and keep great people. I can only talk for Towergate, but our balance sheet is the people and that’s what we think is our big differentiator. We do try and talent-spot as best we can and keep our good people.

You have to keep them motivated, stimulated and rewarded. One of the things we have done is set up an employee benefit trust where the staff own 2% of the company. There’s probably about £60m in the fund at the moment.

We like our staff to think they are mini-entrepreneurs themselves.

How important an incentive is money to entrepreneurs?

Entrepreneurship is about wealth-creation. People who feel embarrassed about talking money partly miss the point.

I do believe there have to be goals. Part of the key performance indicators for an entrepreneurial business should be the financials. We have a mantra at Towergate — make money, have fun and do good. And I don’t think any of those are mutually exclusive.

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