The $72bn broker
Anyone of a certain age will have the opening credits of the 1970’s hit TV show The Six Million Dollar Man etched in a dark corner of their brain, dormant, but perfectly formed and ready to be extracted at a moment’s notice by nostalgia shows and pub quizzes.
At the beginning of every episode, as you are now doubtless recalling, astronaut Steve Austin suffers a horrendous test-flight accident and is left “barely alive”. Luckily for him superspook Oscar Goldman pledges the capability, technology and wheelbarrow-loads of Ford-Carter-era cash to make him bionic and “better, stronger, faster” as a consequence.
Goldman’s voiceover on the sequence is so pompous and lacking in self-awareness it is almost beyond parody.
Satirising this sequence was a comedy staple of the time. Today it would be a mega-meme, popping up in a new guise on social media every time anything newsworthy happened.
Why do I mention this?
I had a little Six Million Dollar flashback last week when Greg Case of Aon and John Haley of Willis Towers Watson published a joint manifesto explaining why they were merging.
If there was ever a document worthy of narration by the actor who played Oscar Goldman, this is it!
I challenge you to read it without laughing.
Do not attempt this feat while drinking a hot beverage.
If you do make that mistake the infusion will do a rapid circuit of the parts of you that only an ENT specialist should ever see, accelerate and exit via your nostrils, spraying your keyboard, mouse and screen as if someone had set a muck spreader loose in your home office.
What’s so funny about it?
First the premise. The document’s big idea is that these two global broking firms must come together in order to be able to innovate (and by implication in so doing, save the world).
My question is, exactly what resources is a $46bn market cap company like Aon lacking that are somehow holding it back from innovating?
Are we to believe that Aon is perched on the edge of a magical threshold? Will the combination with the $26bn Willis suddenly tip it over the edge into a nirvana-like state of permanent revolution?
Does waking up one day as a $72bn company make you come over all nimble and creative?
The first drop of snorted coffee hits the laptop screen right now!
We all know necessity is the mother of invention. Aon merging with Willis removes the necessity to innovate.
Indeed the merger makes innovation almost irrelevant for years to come.
Innovation is not going to move the dial on a $72bn broking monster with overlaps in all classes, in all services, in all territories and almost all cities. Brutal synergies, efficiencies, cost squeezes and redundancies will do the real work.
Here’s the logic of AON+WTW: Aon has much better margins than Willis and it will take Willis years to catch up. Willis shareholders want some of what Aon has. They have been patient but they have had enough.
If Willis were planning on doing this as an independent it would get rid of current management and spare no expense to bring in the best possible CEO to get the job done.
Who could they hire? Now let me think.
After a brief search they would find someone exactly fitting Greg Case’s description to come and do the job!
By merging with Aon, Willis management stays on for a while at least, they get the real Greg Case and each knocks out one of only two true competitors in global broking – perfect!
But innovation? Please! If it were true that you had to be a $72bn company to be able to innovate, Insurtech wouldn’t exist. The greatest insurance innovations today are happening in companies many thousands of times smaller than Aon or Willis.
Innovation is a state of mind, not a function of your bank balance.
The only true barriers to innovation are intellectual and cultural. There is an almost unlimited ocean of risk capital available to back genuinely disruptive ideas and the people with the vision to carry them out.
Aon-Willis won’t have to innovate, it will just need to recognise and buy the best innovators and assimilate them before they become too disruptive.
Where else might the reader’s tea hit the keyboard?
Language, dear boy. We all love the vibrancy and visceral immediacy of English.
But new language is only ever a millimetre away from hubris, or indeed something more sinister.
To show I am a good sport, I am prepared to overlook the bizarre repeated insertion of the superfluous modifier ‘truly’ before almost every adjective, for this is a disease afflicting the continent of North America as a whole and is endemic in its top companies.
Using truly on such a monumental scale is rather like the popular teenage slang tendency to preface every statement of fact with the words: “I’m not going to lie, but…”, “no word of a lie…” or my particular favourite south London variant: “I ain’t even gonna’ lie…”
The implication being that the speaker is usually in the habit of not telling the truth!
But I digress.
Some of this stuff is hilarious.
Case and Haley somehow manage to keep a straight face when they write the following:
“We will address the most pressing challenges – known and unknown – facing leading organizations and society today”
But I can’t when I read it! Bang goes another espresso!
This $72bn miracle is truly innovative. Behold, it solves the world’s as yet unknown problems!
(Free business tip: wait until the world knows it has a problem before you start selling the solution, otherwise you don’t make any money.)
First the comedy - then the tragedy.
This treatise goes to great lengths to list the wonderful things the new Aon-Willis is going to be able to do. It does so to hubristic excess. That’s the comedy part.
But it is what it doesn’t say that contains the pathos.
The great sin of omission in this document is the staff.
Who is going to do all this speedy innovating?
In its executive summary, introduction and five chapters, I have only found one mention of the human beings that Aon-Willis will need to work its magic.
“…investing to empower our people to deliver distinctive client insight and advanced analytical capabilities…”
One mention of “our people”.
No ambition to make Aon-Willis the destination of choice for top talent.
Nothing on training. Nothing on a diverse and inclusive workforce. Nothing on career opportunities and progression.
Not even a vague statement of intent simply to make the new organisation “the best place to work in insurance”.
Absent even is something that articulates the sentiment: “don’t worry, we won’t let everyone go, we do still need good people.”
Oscar Goldman promised to make Steve Austin “better, stronger, faster”. Aon and Willis’ bionic $72bn broker is definitely going to be bigger. Much bigger.
That means it will be undoubtedly be financially stronger, but faster or better? How?
The great tragicomedies are all about the truth of the human condition. Back in the Aon-Willis script much wisdom is buried. I’m just not sure it was intentional.
I can’t resist just one more excerpt from the boys:
“…what we are building together defies traditional categorization”
You can say that again! Truly!
Now pass the screen wipes, I’ve got some mopping up to do.