Homegrown

In a masterpiece of marketing, Dubuque, Iowa, now calls itself the “Masterpiece on the Mississippi.” Indeed, in recent years the city of 58,000 has been lauded for its lively, art-infused riverfront development, growing technology and financial services industries, and relaxed way of life.

But in the early 1980s, when David Becker was in high school, Dubuque held little promise or opportunity. The collapse of the farm economy and labor disputes resulted in the closing of the local meatpacking plant and massive layoffs at the John Deere factory. By 1982, the unemployment rate soared to 24%. So when Becker left Dubuque in 1984 to attend college in St. Louis, he says, “I never dreamed for a second that I would be back.”

Even as the city’s renaissance began in the 1990s, Becker still hadn’t given it a thought. He was too busy, first selling IBM systems out of a Lincoln Continental, then attending Harvard Law School and, ultimately, as a consultant with McKinsey & Co., advising CEOs on how to run their businesses. Someone should have told Becker never to say never.

To the surprise of no one more than himself, Becker, 51, has now become a fixture in the hometown he left behind for 20 years. He was lured home by an offer to lead Cottingham & Butler, an insurance brokerage owned by the same family since 1887. He figured he could put into practice the messages he’d been preaching from his perch at McKinsey, with the added benefit of spending more time with his wife, Amy, and his three sons.

Since he started in January 2004, the company’s annual revenues have more than quadrupled, propelling C&B to become one of the top 10 employers in Dubuque. Along the way, he’s helped rebuild a struggling Catholic school system and worked with other movers and shakers to forge the city’s future.

From Consultant to CEO

During his nine years at McKinsey, Becker had seen many of his colleagues leave—some to turn around large businesses, some to join private equity firms, others to start their own companies. But for Becker, uprooting his family from Chicago to become the first outsider to lead someone else’s family-controlled business in an industry he didn’t know was not exactly an obvious next step. Some might even view it as a potential minefield.

Becker himself thought the idea was crazy when, early in 2003, John Butler, the owner of the insurance brokerage founded by his great-grandfather, broached the subject over breakfast. At 72, Butler was looking for someone to help him run the firm. Becker’s father, Marvin, served on the C&B board after many years of buying insurance from the company for the Dubuque-based furniture maker Flexsteel, where he was CFO.

He’d been talking up the talents of his son, the Harvard Law grad and partner at McKinsey. Whether the elder Becker, who died in 2015, saw it as a ploy to get his faraway grandkids back to Dubuque is anybody’s guess.

David Becker attended the breakfast meeting as a courtesy. “I basically told him that’s the craziest thing I had ever heard,” Becker recalls. “I don’t know anything about insurance, and I certainly don’t want to be in Dubuque. So I said, ‘Thanks for the waffle, and no thanks.’”

Several months later, however, Becker started thinking maybe nine years was enough time to be sleeping in hotels 200 nights a year. And like many consultants who spend their days telling CEOs how to do it right, he says, “You get that itch to maybe do it yourself.”

When Becker accepted the offer from Cottingham & Butler, Aon CEO Greg Case, who then headed McKinsey’s financial services practice, invited him to his office for a crash course in insurance. Becker approached his new job as if he were starting a McKinsey study, interviewing the top 30 people to identify the company’s strengths and weaknesses. “Like every business I’ve ever dealt with in consulting,” Becker says, “the people largely know where the problems are and where the opportunities are if you take the time to ask them.”

Becker quickly won the respect of the sales team by burrowing into the details of the business to figure out how producers could better help their clients. “My ability to get my hands dirty is pretty high,” he says. “So I wasn’t just a giant bureaucrat who was going to call them and say, ‘What have you done this week?’ It was: ‘How can I help you be successful?’”

Having won their trust, Becker proceeded to the next big challenge: shifting the culture of the family-owned business so managers felt they had greater authority to make decisions. Butler’s great-grandfather had started the firm in 1887. When Butler joined 70 years later, he was one of just three employees. Over four and a half decades, he built it into a very successful regional brokerage with 245 employees and more than $34 million in revenues. But as often happens in family-owned businesses led by a singular patriarch, employees were reluctant to do anything without clearing it through the chief.

Ten months after Becker started, his leadership was put to the test. While on a bicycling trip in Morocco, Butler and his wife, Alice, were in a serious car accident, leaving Butler unconscious for several weeks and requiring months of rehabilitation. The situation was precarious, both for him and for the business.

“If it had not been for David, my family would have sold,” says Butler, who is the firm’s executive chairman. “As it turns out, we kept going without a hitch.”

Industry-Leading Growth

Under Becker’s leadership, Cottingham & Butler has vastly expanded its vision, its geography and its size. When Becker arrived, every employee worked in Dubuque, even though 98% of the firm’s clients were located elsewhere. So Becker embarked on an expansion plan to establish offices closer to clients, and today more than a quarter of C&B employees work in regional offices spread across 12 states.

Revenues have grown at an annual average of 12%, from $34.4 million in 2003 to $146.5 million last year, and Becker projects the firm will generate $166 million in revenue in 2017. C&B ended 2016 with 805 employees. With few acquisitions, the company’s growth has been almost entirely organic.

“The C&B organic growth performance is industry-leading,” says Bobby Reagan of Reagan Consulting, which advises brokerages on strategy, mergers and acquisitions. “There are other firms that have matched their results for a given year, but there are few that have achieved the consistent growth they have achieved, particularly with their size. For a firm that will exceed $150 million in revenues this year, these growth results are spectacular.”

Early on, Becker reorganized C&B’s insurance advisory business into specialty practices and divorced that side of the house from the medical third-party administrator. Forced for the first time to stand on its own, the TPA became a successful wholesaler of its services. “It’s the power of being entrepreneurial,” Becker says.

Perhaps Becker’s signature achievement has been establishing a health-and-wellness company that capitalizes on the emerging interest in using data to improve employee health and reduce employer costs. HealthCheck 360° is now the fastest-growing business in the C&B portfolio.

Lifelong Learning

To better understand the analytics that would help him know whether HealthCheck’s programs really worked, Becker enrolled in an online course in biostatistics and epidemiology through the Harvard School of Public Health. “My wife thought I was nuts because it was 12 hours of additional work a week,” Becker says. But it was free, and at least it was related to his work. Becker’s recreational reading includes The Feynman Lectures on Physics, a three-volume textbook based on Nobel laureate Richard Feynman’s lectures to Caltech undergraduates in the early 1960s.

In high school, Becker had been a smart but unmotivated student, choosing study hall over attending class as often as he could. But he was competitive, and when challenged by his government teacher, Donald “D.J.” Ruden, to do more, he accepted. Ruden “got under my skin and introduced me to a lot of ideas and books that started to expand my thinking.” Becker soaked up the books Ruden handed him, many of which were about social inequality. “The curiosity he piqued in me has been something that I think has served me really well in my business career and in my life,” Becker says.

And he never forgot about the tremendous impact Ruden had on the course of his life. After Becker returned to Dubuque, he created a scholarship for the city’s college-bound high school students. Each year he and Ruden gather for a dinner with the finalists. “It’s probably the highlight of his year to sit down with people and talk about how they see the world,” Becker says. “For me, it’s a way to just pay tribute to him and the impact he had on me and on so many young people.”

After graduating from high school, Becker left for college at Washington University in St. Louis. Becker, who has three older sisters, was the only one of his siblings to leave Iowa for college. He graduated in five years with a bachelor’s degree in computer science and engineering and an MBA.

He took a job as a systems engineer for IBM but was unexpectedly reassigned to a three-person sales team pitching Unix systems to Southwestern Bell offices. They loaded a Lincoln Continental with gear and drove from city to city in Missouri, Kansas, Oklahoma, Arkansas and Texas. “I was the worst salesperson one could ever imagine,” Becker admits. But as a tech geek he could fulfill the outrageous promises the other guys made in order to close their deals. Within three and a half years, they’d taken their market share from zero to 98%. “Once you get to 98% market share,” he says, “you kind of get bored.”

Besides, IBM was a mess at the time. So at 26, Becker noodled his way into an early retirement program, packed four suitcases and some stereo equipment and started life anew as a law student at Harvard.

But he learned pretty quickly once he had his degree that he really didn’t want to practice law. So he signed up to meet with a McKinsey recruiter on campus. During his case interview, a hallmark of the McKinsey hiring process, the recruiter unwittingly threw Becker a softball: “If you’re Lou Gerstner and you’ve just been hired to rescue IBM, what would you do?” An eyewitness to IBM’s problems for more than three years, Becker gave what the interviewer described as the greatest answer he’d ever heard. “You talk about a good break in life,” Becker says. “That was it.”

Maybe so, but his success at McKinsey was hardly an accident. “He is extraordinarily intelligent, and I don’t use that word lightly,” says Michael Farello, a longtime friend and mentor who was Becker’s first manager at McKinsey. “Because at McKinsey it was hard for people to stand out for their intellect.”

Colleagues admire Becker for his analytical mind, pragmatic approach to decisions and disdain for hierarchy. He typically distills the two or three essential things that matter and pushes people to create a plan for acting on them. “He can break down a problem like nobody else,” says Nicole Pfeiffer, an employee benefits consultant who joined C&B four months after Becker. “His processor is constantly going on high speed.”

Becker has imbued in Cottingham & Butler the idea of having “wildly important goals,” with constant attention to “how you are moving the ball to accomplish those goals on a weekly basis,” says Chris Vogel, vice president of the firm’s transportation practice. “It’s long-term thinking boiled down into day-by-day activities.”

Becker’s management style reflects his many influences. Among the half dozen he mentions are former McKinseyites like Farello, a venture capitalist who encouraged Becker to take the job at Cottingham & Butler, and Jeff Luhnow, now the general manager of Major League Baseball’s Houston Astros. McKinsey, Becker says, provided “amazing training for how to think through problems.” He also got an education in client service. “We spent almost no time thinking about how to run McKinsey. We spent all of our time thinking about how we help clients.”

Personal Growth

With the vision and direction of C&B’s businesses well established, Becker focuses much of his attention on one of the industry’s greatest challenges: recruiting and developing high-quality employees to drive growth. And perhaps fittingly, one of the obstacles he faces is the very thing that first soured him on the idea of joining C&B. “It’s very tricky to find people who want to come and work in Dubuque, Iowa,” Pfeiffer says.

To combat that, Becker has created an environment that gives young professionals opportunities they can rarely find in companies the size of C&B. In addition to logistical benefits like covering housing costs for college interns, Becker offers access to leadership—a rare find for a recent college grad.

“Most CEOs of 800-person companies tend to put layers in between them and new sales people that get hired. David takes the opposite approach,” says Matt King, a former McKinsey colleague whom Becker brought on board last October to be president of regional operations and corporate development for Cottingham & Butler. “Every time we hire a 22-year-old or think about how to develop those 22-year-olds, David gets involved, because he recognizes that, if the program around recruiting and developing college kids isn’t working, that’s hugely problematic for the future, because they will be the rainmaker producers 10 years from now.”

To identify future leaders, Becker establishes personal mentoring relationships and assigns high-potential employees to cross-company projects. More than five years ago, he tapped two people in their early 30s to lead Cottingham & Butler’s largest industry practice, the transportation division.

“I would challenge you to find anyone in the organization who would question David’s motives as being anything other than in the best interest of the business,” King says. “People respect the outcome because they recognize he’s doing it for the good of the organization.”

When Becker accepted the job at Cottingham & Butler, friends advised him to stick around for three or four years “and then get the hell out,” he says. But over time, the business came to feel like home, and so did Dubuque. “People have a hard time believing it, but I don’t have a high ego need for running a bigger company. I’m having fun. I’m making a contribution.”

Hann is editor at large. [email protected]