Putting people first: EXCEL Award winner John O'Neill effects a successful turnaround at AXA Ireland by building relationships.

The IABC/Europe and Middle East EXCEL Award recognizes contributions to business communication by an organizational leader, usually a CEO, who is not a member of the International Association of Business Communicators. These contributions include initiating, directing, supporting or sustaining outstanding and effective communication programs. For 2005, the award went to John O'Neill, CEO of the Dublin-based insurance company AXA Ireland.

O'Neill took the reins at AXA Ireland in 1999, when the French company AXA took over Guardian Royal Exchange. At the time, AXA was concerned about the losses the Irish business was incurring, and was anxious to see action to redress the situation. AXA came very close to pulling the plug. AXA bailed the Irish company out, but made it clear that the company had better get things in order--quickly.

The new CEO did just that. O'Neill communicated to the 900-plus employees a clear vision of what the company needed to do to get back on top. Following a 180-day program that communicated key concerns and potential solutions, O'Neill introduced a strategy called R2P (return to profitability) that clearly outlined the direction the company would now take, and followed up by introducing a performance management system. All staff now had clear objectives that were directly aligned to the new strategy.

Within three years, O'Neill brought AXA Ireland back to life, largely by encouraging high performance, respecting individuals and allowing people to grow--and gaining the trust of employees along the way.

CW Executive Editor Natasha Spring met with O'Neill in December at IABC's EuroComm conference in Paris, where he received the Europe and Middle East EXCEL Award, to talk about AXA Ireland's turnaround and his views on the role of communication in leadership and success.

Q: Let's talk about how communication helped make the turnaround happen at AXA Ireland.

A: Communication has helped AXA Ireland come from what was probably the worst-performing entity within the AXA Group in 1999-2000 to one that is highly regarded now by Henri de Castries, the chief executive of AXA global. But before I start talking about that, I just want to throw out a couple of ideas. When I started working with Guardian Royal Exchange in 1972, I was at the bottom. I came straight out of school and moved along through the ranks there. I can't say that I got any training to be the chief executive.

So, I suddenly found myself chief executive designate and I've got to do the job. One of the best pieces of advice I got was to look outside the business that we were in--to look at successful businesses and see if there were lessons to be learned.

Two of the big influential companies that I looked at happen to be American companies: Wal-Mart and Berkshire Hathaway. I think there are some very distinct lessons that can be taken away from these companies. Wal-Mart: You can like it, you can loathe it, but you have to recognize that it is the biggest retailer in the world. In looking into the background to what has turned Wal-Mart into the dynamo that it is today, sure, there are places where they made mistakes, and the current chief executive acknowledges that. But when Sam Walton was interviewed 20 years ago when Wal-Mart was the biggest retailer in the U.S., he was asked if he had ever thought that the store that he was creating would turn into this huge operation. And he said he knew that if he could just get people to do their jobs and think about the customer, and if he kept an eye on the costs, they would have a world-leading operation.

Fast-forward to Berkshire Hathaway and Warren Buffett, who was recently asked what he looked for when he looked at companies to buy. He said he looked for a company that was controlling its costs and building superior customer service. Nobody can say that Wal-Mart and Berkshire Hathaway were overnight successes. Now when you look at successful big businesses, you see businesses that are not necessarily founded on one breakthrough idea. They're not founded on revolutionary, technology. They're generally founded on hard work, day in, day out, mistakes, successes, blood, sweat and tears. And blood, sweat and tears are things only people can give you. So, when I think about our business, I think about the people side of our business and how important that is.

Q: So you're saying that looking outside your business and understanding the importance of plain hard work are key. How does this relate to your successes at AXA?

A: In 1999, when I was asked to take over as the interim CEO of AXA Ireland, we had a business that had been going reasonably well but that was a historical insurance-type operation: command and control. You get the instructions, you send them out, the people do what they're told to do, or they get fired or penalized in some way. The customers, they have to have motor insurance, they pay their premiums. We take the premiums, and if we can't deal with their queries, too bad, they wait. Forty people in the broader management team were asked to rate the company's morale. It ranged from the worst I have ever experienced to the worst I've ever heard of. If you asked anybody, including management, what the philosophy of the company was, what our vision was, our strategy, I don't believe anybody could answer that question. Certainly the people on the floor didn't know what our business was about except that we did motor insurance. We knew that the staff who were facing the customers every day knew more about what was going on than we did, and we needed to bring them on board.

We started with a 180-day plan that set out the issues that we felt needed to be fixed, how we were going to set about fixing them, and a time frame. And as we started talking, we said, "Who are we going to share this with?" We said we could have problems with the unions about this, so maybe we better talk to the employee representatives before we actually go public to the employees. So we talked to employee representatives in a very open way about the issues, about the solutions as we saw them, and about the plan. They didn't like it, and they were right: An awful lot of what our employee representatives were saying was the truth and was better thought-out than what we were writing down. That was a huge eye-opener to us as a management team. It was that realization that actually we didn't know as much about our business as the people who, day-to-day, did business with customers.

So we revised our plans, and we took on board those ideas that people came up with. We went to the employees on the first of our road shows and presented the issues and the proposed solution. People had never had this experience before in our organization, so it was a bit sluggish to get going. We knew that they had more to give, so we set up something called Mad House, which was essentially a designated room where people could go in teams of seven and just think about ways to improve our business. We deliberately called it Mad House because we wanted people to be mad, not sane, and not to think of normal, incremental changes, but to think about this completely outside of their conventional experience--come up with mad ideas.

People in different divisions didn't really communicate with each other at all. Finance didn't speak to the people in underwriting, who didn't really speak to people in sales. Everything was separate. So we said that in the Mad House we want someone at each different level to be involved--a junior person and an older person--and no one can be from the same department.

After three days, one of the managers came back and said this was the most exciting thing that has happened to her in her business life. She said at first they had no ideas, and then they started putting them up on a board, and within about an hour they had 70 ideas about how we could improve the business.

Each year we've added to this, and now groups of people not only have to come up with the idea, but they actually get to implement it as well.

Q: How much of your time is dedicated to communication initiatives both internally and externally?

A: I think I spend about 30 percent with shareholders and 30 percent on internal communication, and I think it needs to be at that level. As the CEO, you need to be out there all the time. You need to let people see that you're human, that you're like them, and that you understand a little bit about what their lives are like. Sometimes you can become detached in your own world and think that you're different. I know I'm not different.

Q: You mentioned that you haven't had any sort of formal or explicit training to be CEO, but you clearly have an aptitude as a leader. What is the best way for an organization to cultivate leadership?

A: One of the great things that I learned early on was the value of reading about other businesses. I still have up on my shelf In Search of Excellence, which is from 1974. There is a huge amount of good stuff in that book about running a successful business, including great mistakes that have been made. All of that stuff is really powerful in turning ordinary people into extraordinary performers. And that's all of our jobs. It's just seeing that these people are not special; they just do things right.

In terms of talking to employees, one of the most important messages I learned was from the first road show that we did. It didn't gel and it wasn't perfect. We were new to this. We weren't good at presenting ourselves. We set out just to be honest and open and to try to be simple in our language. It didn't really work--there wasn't buy-in from staff You didn't feel it.

Q: Why do you think that was?

A: For one thing, there was no mention of what's in it for them. So we started to think about doing the presentation from the staff's point of view--how will they be better off in this, how are we going to make the environment better for them. We also built a new pay structure where we had a profit share that was directly linked to the performance of the company. Up to 10 percent of everybody's pay is now dependent on us getting in excess of budgeted profits, on top of their salary. Employee satisfaction directly affects how customers are treated.

These are the simple things, but they were so important in rebuilding the company. Not just rebuilding in terms of profit but in building a different culture, building a culture that's about mutual respect, respect for everybody in the organization, respect for customers and ultimately respect for the shareholders, who give the money to run the business.

Q: You've touched on this, but perhaps you can expand further. How has communication helped increase profits at AXA Ireland?

A: The emphasis on this whole concept of treating people the way you'd like to be treated has made us very productive. We've become very profitable. We're probably the most profitable entity within AXA Group, even though we are probably the smallest. On our profit line, we had lost [US]$30 million the year I took over. So we had made $2 million [in 1998], lost $30 million, then we made $30 million profit, then we made $60 million profit, then we made $120 million profit. Last year we made $158 million profit, and this year we will have an extremely good year.

To me, it's all about establishing trusting relationships, mutual respect. It's making the business personal. In 2012, which is the target we have for doubling our business, I want to have an organization where people are happy to come to work, enjoy it, are being challenged, are supported, can be the best that they can be in that job--and are proud of what they do and of what we do. And I think the rest just follows. If you can actually get that philosophy within the organization, profits, the whole lot, it just follows. There's no magic. Communication is the lifeblood of any business. Without it, even strong businesses can die.

Minimizing 'damage'

Part of John O'Neill's practical nature is to take something that's an issue for two parties and make it a win-win for both. When asked how AXA Ireland approaches corporate responsibility, he offers a perfect example of a successful campaign that served both the public and the company.

In June 2001, as part of a corporate social responsibility effort to increase seat belt use in Ireland, AXA co-sponsored a television commercial titled "Damage," with the Department of Environment in Northern Ireland and the National Safety Council. The commercial, created by McCann Erickson, graphically depicted the outcome of a road accident when even one passenger does not wear a seat belt. Although the commercial aimed to increase seat belt use by all drivers, it specifically targeted the 16- to 35-year-old demographic.

After two weeks, an independent telephone survey of 200 people by Ulster Marketing Surveys revealed that 87 percent of 16- to 35-year-olds admitted to being "influenced a lot" by the commercial. Seventy-five percent of respondents said they would now be "concerned to wear a seat belt."

Prior to the "Damage" campaign, a National Roads Authority survey reported that only 57 percent of drivers and front-seat passengers wore seat belts, and as few as 20 percent of rear-seat passengers did. The campaign coincided with an effort by local law enforcement to issue on-the-spot fines for not wearing seat belts.

about the EXCEL award

The IABC/Europe and Middle East EXCEL Award, the region's highest honor, recognizes a non-member who has demonstrated leadership and management abilities in fostering good organizational communication and participating in a strategy that has contributed to the business success of the organization. Nominees are evaluated on a host of criteria, including:

* Leadership, management and communication skills.

* Diversity of communication audience.

* Creativity and innovation of communication strategy.

* Commitment to communicating with all audiences, both internal and external.

* Ethics and professionalism.

IABC/Europe and Middle East is now inviting nominations from members for its 2006 EXCEL Award. Nominations should be submitted to Andrew Riley, chair of EuroComm, at [e-mail] by 15 September 2006.