This is no fly-by-the-seat-of-your-pants, winners-know-how-to-wing-it, make-it-up-as-you-go-along rebel dissenter.
Rather, Adrian Gore is an actuary who built a business empire based on sound economic principles and a clear vision of finding a sustainable solution to a market-wide challenge. The disruption is what happened along the way.
“I’m not even sure I really think of myself as an entrepreneur,” he says — a startling statement from a man who’s held up as one of South Africa’s proudest examples of entrepreneurial success, and who speaks widely on the topic of entrepreneurship (Gore is chairman of the South African chapter of the global entrepreneurship organisation, Endeavor).
What he means, however, is that he’s not a serial start-up entrepreneur.
“What I really like is the institutional scale of large organisations and what they can do for society. Those are the two things that got me going when we started Discovery. I saw a clear challenge in society that needed addressing and I wanted to start a large organisation that could do it,” he says.
The need was to bring about a fundamental change in the medical schemes industry, which Gore, as a young actuary working at Liberty, could see was unsustainable.
“Medical schemes were running into real trouble, and as we tried to figure out how to change things to make them sustainable we hit on the profound underlying reason that things weren’t working,” he explains, before launching into an analogy that is at once so simple and so brilliant it leaves you wondering why no one thought of it before.
“Imagine you bought groceries in the same way that you consumed medical services under the traditional medical scheme model. You’d pay a monthly premium and then walk into a supermarket whenever you felt like it, take whatever you wanted off the shelf and go home. Food inflation would be stratospheric. That’s exactly what was happening in healthcare. People were paying a monthly premium, and then consuming every benefit available to them because it was in their interest to do so. If they didn’t use it, they’d lose it.”
This paved the way for the establishment of the medical savings product for day-to-day healthcare. It incentivised people to be more prudent with their benefits so they could retain what was their money, and in so doing revoluntionised the entire medical insurance industry.
It was the start of great things, but selling an entirely new concept to the market is hard work, as Gore discovered.
“I learnt that the ability to excite people about your product is critical. And I don’t mean in a counterfeit, marketing-hype kind of way. I mean in a real, academic way,” he says.
Gore was able to demonstrate the brilliance and elegance of the medical savings product concept in such a way that clients could make a clear link between what the product offered and how it could solve a problem they were experiencing.
“We were selling health economics, there was real academic rigour behind it. So we could explain to the CFO of a company why his medical scheme was experiencing health inflation and what our remedy was. When the penny dropped for people, they wondered how the old system could ever have worked — which of course it hadn’t been doing for a long time,” he says.
The pioneering nature of the medical savings account cannot be over-emphasised, but its true genius lay in its approach to incentivising behaviour, something that lies at the core of Discovery’s approach to solving problems even now. It underpins the slew of groundbreaking incentive-based innovations that were to come, including Vitality and the recently-launched Discovery Insure, with its Vitalitydrive offering. Not everyone was a fan, though.
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“We were slated by competitors when we launched Vitality rewards. They said we were wasting healthcare rands on gym memberships and flights and that this money should be channelled to healthcare,” Gore explains.
It was not the last time Discovery’s detractors would be proved wrong. It was precisely the introduction of the Health & Racquet Club (now Virgin Active) membership incentive that truly launched Vitality into the stratosphere.
And since then, the power of incentivising healthy behaviour has become globally recognised. In a world where, as Gore explains, 50% of morbidity can be attributed to four lifestyle diseases that originate from three poor lifestyle choices (smoking, unhealthy eating and poor physical activity), healthcare has become intensely focused on how to get people to make healthier lifestyle choices.
“And if anything, this kind of incentivisation works even better with driving behaviour than it does with health,” says Gore, citing the success of the Discovery Insure insurance product which incentivises and rewards customers for good driving habits.
Gore’s vision is to scale the Vitality model and insurance model across the world, but while the company already has a foothold in China, the UK, the US and Singapore, he’s quick to point out that it’s in its infancy on the global stage.
Whenever the issue of Discovery’s offshore ventures arises, so too does the question of its initial ‘failure’ in launching Discovery in the States. A venture undertaken just after the company had gone public, Gore is adamant that the concept was well-received but that the size of the big-hitters and the discounts they could command meant Discovery was out-priced.
“We found we were paying 20% more per hospital event than the big guys were paying and we couldn’t compete,” he says. The company took a decision to call it a day and pulled out.
On the topic of failure, Gore has some interesting views. “I don’t buy into the idea that you need to fail first in order to be successful. I think the less you fail the better. But if you do fail, which sometimes happens, I think you should be able to start over again without a stigma. Failure is not desirable but it should be acceptable,” he says.
Americans seem to have got this right, he believes, but South Africa still punishes those who try and fail. Which leads us back to the topic of entrepreneurship, about which Gore has two deep-seated beliefs:
- Entrepreneurship is the only solution to the country’s unemployment problem; and
- Mentorship is the most powerful force for good among entrepreneurs.
On the second point he speaks from direct experience. Ex-RMB Laurie Dippenaar was chairman of Discovery for 15 years, after having originally agreed to invest R10 million in 27-year-old Gore’s idea for the company.
“When you start a business there are things that not only have you never experienced but you’ve never even considered. Many entrepreneurs think they don’t need a Board — that it’s a waste of time — but having a bunch of smart, experienced people giving you input is a gift from heaven. If I had not had a Laurie Dippenaar when I started, Discovery would be a very different company today,” he says.
He still draws on the collective input of a strong team. Discovery’s Exco meets on average for seven hours a week every Monday.
“We go through everything. Sometimes it’s a bun fight. We don’t stick to the agenda. Some things we’ll spend three hours on, other things we won’t get to. There’s rigorous debate and arguments, but it means that every week 20 really smart people are all thinking and providing input. No one is making buy/sell decisions. Everything is debated until consensus is reached,” he explains.
Reaching consensus is the path Gore prefers, which is surprising when one considers how he describes himself:“I’m actually an impatient and frustrated person. I’ve got a thin skin. I don’t take criticism well. Because of that, I don’t like to command because I don’t like the push-back that I get. So I far prefer consensus.”
One of the marks of a good leader, he believes, is the ability to instil hope, inspiration and a sense of possibility among people — and to do so authentically.
“Some of the most amazing people I work with give me a sense that ‘it is possible.’ In my best times I hope I do that but in my worst times I know I don’t. I slip into ‘Command and Control’ mode and I’m hard. But I always walk away from those sessions knowing they weren’t optimal,” he says.
But, he adds, leadership skills can be learnt. “No one leadership style is necessarily right, and it’s important to be authentic to who you are. But I do think you can identify your weaknesses and work on them. I’ve learnt how to motivate people when they are at each other’s throats by continually deferring to the common purpose at hand,” he explains.
Where he leads the company to next is clear. “We’re trying to build the best insurance organisation globally. Not the biggest, but the best. And I believe we can do it. It’s about changing financial services based on the idea of helping people to make the right choices — whether that’s to do with health, saving or driving,” he outlines.
But while he’ll accept that Discovery has come a long way, he adds, “We’re still a speck globally. There is a great deal still to build.”
This is perhaps why he finds it difficult to answer questions about what he’s most proud of when looking back on what’s been achieved: “I suppose I don’t really feel I’m in the position of having finished the race where one looks back and takes stock of it all. I’m only halfway through the marathon.”