As part of Cleveland Magazine's 30th anniversary celebration, the editors have chosen 52 of their favorite stories from the magazine's archives, and wish to share them with you.
A new story will appear every week at Clevelandmagazine.com. It might be controversial, comical, nostalgic or nonplussing. But it will be Cleveland.
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From Cleveland Magazine, June 1987
"I am a classic overachiever. I've got to tell you what an overachiever is. An overachiever is a person who spends his entire life proving to himself that he's not as bad as he knows he is ... I have spent 15-plus years in intense psychotherapy of one kind of another in a continuing effort to understand mysey'and to prevent mysef from responding to my own emotions by doing things that are counterproductive to myinterests. "- Peter B. Lewis, "Business As A Creative Process," Cleveland Center for Contemporary Art Lecture Series, November 1986.Being with Peter Lewis in his private jet streaking toward the afternoon sun on the way from Tampa, Florida, to Austin, Texas, is like being on tour with a rock star. Having been whisked by Rolls Royce to' Tampa International Airport's private jetport after a party, Lewis will catch another limousine in Austin to take him to yet another bash - the third of the day, which started in Atlanta.
On one of the jet seats is a gift from some of Lewis's admirers in Tampa, a huge basket of food with perfectly cooked shrimp, delicately spiced sandwiches of rare roast beef, fresh green grapes, cheese, jumbo wine-colored Florida strawberries, and champagne. Lewis, a rangy, athletic man of 53 whose bright eyes can change in a blink from merry twinkles to ruthless slits, settles for a bottle of sparkling water and a few grapes; food has been pushed at him all day, and there is more to come in Austin. A guy could get fat if he isn't careful.
A guy could also get giddy from the kind of adulation heaped on Lewis. "I want to be loved," he quips - and he is. As the eccentrically brilliant mastermind behind the billion-dollar Cleveland insurance empire, the Progressive Corporation, Lewis is barnstorming across the country, meeting and partying with Progressive's 4,700 employees in celebration of the company's 50th anniversary this year. His loving fans are his far-flung employees, most of whom have never before laid eyes on him and never will again.
There is to be an anniversary party in each of the 15 cities in which Progressive has offices. One Progressive executive jokingly calls the tour "the Bataan Death March" - 20 parties in five days, capped off with an all-day round of affairs in Cleveland.
From Richmond to Colorado Springs to Sacramento, Peter Lewis is greeted by cheering Progressive employees. He shares a drink and a plate with them; he shakes their hands. To thunderous applause and delighted squeals, he gives each of them a share of stock in the company, enclosed in an envelope decorated with a signed and numbered print by an up-and-coming contemporary artist.
To the troops in the field, Peter Lewis is Legend, the embodiment' of their company and their patriarch and benefactor -as Carl Jung might have put it, their mystagogue. He lets them know that they are vital to the company - one of the fastest-growing insurance companies in the world, having doubled its net sales of property and casualty insurance premiums in just the last two years. He urges them to think big, use their imaginations, work hard, and, last but never least, have fun.
"Joining Progressive," Lewis says on the plane, "is like joining a religion."
"I think the town is finally beginning to honor some of its entrepreneurs," Lewis says, referring to himself as well as to other members of Cleveland's business avant garde, people like mall developers Dick and Dave Jacobs, who own the Indians, and Cleveland Force owner Bart Wolstein.
"The town is changing in that respect," he says. "The old caretakers, the custodians of the Establishment, are starting to understand the value of entrepreneurs. It's necessary if the town is to survive and grow."
As Progressive's own growth has exploded under his leadership, so has Lewis's
vision and ambition, so much that it has become impossible for him to confine
himself to Progressive's East Side offices. He has, in effect, gone public.
By now, everyone in town has heard of his plans to build a $300-million corporate
campus in downtown Cleveland - "a plan thatis stillin th efantasy stages," he
stresses. Likewise, Progessive's partnership with Shaker Heights financier Alfred
Learner in a major acquisition of AmeriTrust stock has drawn unavoidable attention
from the community.
Since Lewis took control of the company in 1965, it has grown from an entreprenurial effort started by his father, Joe, into one of the country's major property-casualty insurance companies. "The story of Progressive is one of the best business stories of the last 20 years," he boasts. Indeed, there is scarcely another company of similar size in America that has been so totally shaped and influenced by the personality of one man.
Perhaps the biggest single reason for Lewis's willingness to emerge into a high-profile position is that he sees the success of Progressive as a vindication of his unorthodoxy and a testament to the effectiveness of his management style - a style based on the tenets of his life: work hard and have fun, both of which he does as if he were living his last day on earth.
" Profit is love, " he insists. "Business is seduction. " He pauses to let the thought grow in the glowing sunset over Texas. 'Everybody wins," he says.
Such pronouncements have earned Lewis a reputation as something of a character in the business community. "Controversial." Lewis buffs the word. "The 'controversial' Peter Lewis." He throws up his hands in frustrated resignation.
It's funny he should say that, because it is a reputation Lewis himself has fostered. How many CEOs in town are willing, even eager, to admit that they have spent almost two decades n psychoanalysis? Or that they got their job because their mother bought it for them? Lewis is controversial because there is no dividing line between his personal life and his company.
His office in Lander Circle might as well be his home. He walks around in his stockinged feet and maintains a dining area so he can be served meals there. The visual link between his office and his home (homes, rather; he has residences n Beachwood, Lyndhurst, New York, Washington, D.C., and amaica) is his vast collection of contemporary art - works by Red Grooms, Claes Oldenburg, Robert Rauschenberg, Andy Warhol. His ex-wife, Toby, is his corporate art curator. His brother, Dan, is a company vice president. All that is missing are his three children, who are grown and on their own.
"We are all, in a general sense, Peter's children," smiles Pudge Henkel, the former Jones, Day lawyer who went to work for Progressive in a highly publicized move after managing Gary Hart's presidential campaign in 1984.
Lewis, Hart, and Henkel have been friends for years. Contrary to the popular assumption about high-powered businessmen who kneel at the altar of profit, Lewis is a political liberal and a Democrat. He is active in Democratic fundraising nd is a well-known angel among the cream of the country's Democratic leaders. When in town on a fundraising expedition arlier this year, Senator Ted Kennedy sought out the comforts of Lewis's companionship and sumptuous Beachwood enthouse.
Occasionally, Lewis's quest for profit and his political inclinations dovetail, as they did on the day this spring when Progressive and Alfred Lerner finalized their assault on AmeriTrust's stock.
Lewis fielded calls all morning from government leaders n Columbus, who needed to be kept abreast of the deal. His ood friend Dick Celeste called. Then state attorney general Anthony Celebrezze.
Lewis exulted in the whirl.
"Where are my notes?" he asked no one in particular, rifling through the papers on his desk after being told Celebrezze was on the line. "I have to have notes when I talk to important people, be they politicians, or young women whose affections I seek."Then Al Lerner himself called.
"Al is another one who has amassed a fortune without ever getting his name in the papers," Lewis had said earlier.
Lerner, a business partner of Browns owner Art Modell, is just earning his reputation as a bank takeover specialist. His first major score, under the tutelage of ubiquitous national takeover artist F. Phillip Handy, was the Equitable Bancorporation of Baltimore in 1981.
"Hi Al, how you doing?" Lewis says into the phone. "What's happening? Uh huh ... yes ... $55 million, uh huh, I can multiply ... yes ... yes."
One week later, the market activity triggered by Progressive and Lerner's plunge into AmeriTrust had increased the market value of the Progressive-Lerner investment by $22 million.
Lewis cut his teeth in politics by working as the Ohio finance chairman for George McGovern's 1972 presidential campaign.
"When McGovern started winning in the primaries," Lewis says, "the pros came in and kicked all of us dilettantes out of the campaign. But it was fun while it lasted. I did it essentially because I hated Richard Nixon. I believe so much in freedom - anything that smacks of authoritarianism or control is very distressing to me."
"It didn't work out for Pudge because Pudge does not want to listen to anybody else," Lewis says, sounding just like a father.
Lewis's paternalism manifests itself in certain company policies. For instance, there is a "dress-down" day once a month, when employees are allowed to wear anything they want to work. This year, Lewis instituted an employee-wellness progam and hired a full-time physician to administer it. And he decorates Progressive offices coast to coast with contemporary art as much to help boost morale as to satisfy his own compulsion.
"The art has a very powerful effect on our people," Lewis says. "More powerful, I suspect, than anyone really knows,"
Lewis once brought a series of Andy Warhol's famous Mao Tse-tung silkscreens to the Progressive offices on Wilson Mills Road. He left them in the lobby and dashed off on a business trip. The subject of the portraits so distressed his employees that they petitioned him to remove the prints from the premises, which he did (placing them in the billiard room of his Beachwood penthouse). The incident was so unusual that it has become a case study in employee relations that is taught in business schools around the country.
Another classic Peter-Lewis-as-benevolent-patriarch story is told about his
first encounter with George Forbes, Cleveland's most powerful politician. Lewis's
dream of a downtown corporate campus must be approved by Council President Forbes
before it can really begin to take shape.
It was Halloween - a special day at Progressive, when employees are encouraged to come to work in outlandish costumes. The sight that greeted Forbes when he walked in the door looked like the intergalactic barroom scene in Star Wars.
Lewis was conducting a board meeting when Forbes arrived. Forbes made his way in utter bafflement to Lewis's office, when from behind the boardroom door emerged a man wearing a Lone Ranger suit. The man said, "Hello. I'm Peter Lewis."
After talking, the two men became friends, and Forbes told Lewis he would
give the lakefront project his okay. "He told me that all he wants from me is
fair treatment for the blacks at Progressive," Lewis says. "I told him, 'George,
that's not asking anything at all.'"
Lewis describes himself as "half screwball, half businessman." While it is an accurate description as far as what the words mean, it leaves the inaccurate impression that because of the screwball side, one might be able to take advantage of him, perhaps slide something by him; that he might not be as tough as the head of a billion-dollar company should be.
Just the opposite is true. Lewis is a demanding taskmaster who would sometimes rather kick a lazy employee out the door than sit down and talk out the problem. Progressive's average employee is only 29 and has a corporate life expectancy of little more than two years.
"Progressive used to have a reputation for grinding people up," says Pudge Henkel. "The company's core values used to be based on profits from insurance premiums. Peter is a brilliand intuitive insurance executive with a very strong profit discipline. But he has changed the core values to be more people-oriented. Peter has his own ideas about glasnost."
The company's "core values" are its guiding principles as Lewis develops and defines them - and redevelops and redefines them. They are not tacit or nebulous. They are, in a sense, carved annually in stone. They are explained to prospective employees in video presentations and are clearly spelled out in the annual report, which Lewis writes himself. "They dictate our decisions and actions," Lewis wrote in the latest one.
Chief among the core values is, of all things, the Golden
Rule; yes, the do-unto-others rule, a value that has been out of vogue in corporate America for so long that people think they are supposed to be screwed, not loved, by multimillionaire businessmen. Next on the list of core values is integrity. Then purpose, excellence, and, finally, profit. A less complicated person than Lewis might see an inconsistency in placing profit alongside such lofty ideals. More than likely, they would see him asa ... well, a screwball. Perhaps Lewis's greatest feat has been elevating the mundanities of property- casualty insurance into the realm of the sublime.
"The whole point," Lewis says, "is to give people the opportunity to excel. People who are given the freedom to do their best do spectacular work. My job is to figure out how to get them to do their best."
The company's current core values - which are the same as Peter Lewis's personal core values - did not come to Lewis in a startling epiphany one night, The values, like Lewis's life, have evolved over the 20 years that Lewis has run Progressive. And while the core values are protean, they are always geared toward profit. Profit itself is a core value, but in its mysterious way, it is also the sum of all the core values.
Such a model is really not much different from the ones by which most businesses operate. The difference lies in Lewis's ongoing examination of profit goals in terms of human relationships, and in his basing company policy on the results of these examinations. Over the years, Lewis has come to one inescapable conclusion that has become the center of his company policy. In his "Business as a Creative Process" lecture, he put it this way: "The reality of business is that the more you contribute to the lives of people, the more money you make."
As Lewis is fond of pointing out, his history is consistent with Progressive's. His father, Joe, started the company in 193 7 in the rear of a Euclid Avenue autorepair shop when Peter was four years old. It began as a mutual agency that sold car insurance. Since childhood, Peter's only career goal has been to run the company. He has never worked anywhere else. Now, as Progressive's chief executive officer, president, and chairman, Lewis owns about 13 percent of the company's stock, worth roughly $100 million.
Joe Lewis died of a brain tumor in 1955, several months before Peter graduated from Princeton in liberal arts. Mr. Lewis was not yet 50 when he died, and his early death had a profound effect on his son. It sharpened his lust for life. "In a way, you feel like you should not live longer than your father," he says. "I've already lived several years longer than my father did, so yes - in a sense I feel like I'm living on borrowed time."
His most obvious response to that feeling is his lifestyle: the chauffered limousine, the fabulous apartments in the East Coast's power centers, and, most visibly, the riotous celebration of the most extravagant, expensive contemporary art available. Lewis is especially fond of the work of Red Grooms, which he buys directly from Grooms's gallery in New York. The centerpiece of Lewis's two-story Beachwood penthouse, which features a 1,200-square-foot bathroom, is a threedimensional Grooms work depicting a football game. It is called The Big Game, and indeed it is. it weighs 600 pounds.
If Lewis were 30 years old, one might say his lifestyle bordered on ostentation. At 53, the only thing that is fair to say is that he is enjoying his money. He is by no means gauche, and in fact displays the subdued tastes of old money, cast in a contemporary format.
And contrary to his occasional quips, he is not really a skirt-chaser. At social functions, he usually shows up on the arm of his ex-wife, Toby.
"I got divorced because I wanted to know what it was like to be single," he says. "I was married so young. I like being single, but I think that maybe it's time for something a little more permanent. Maybe I'd like to live with somebody; I don't know."
Lewis got married only months after his father's death, right after he graduated from Princeton. He went to work full time at Progressive, which was then being run by Joe Lewis's partner, Jack Green.
"Peter assumed a great deal of responsibility at a very early age," Toby Lewis says at her Shaker Heights home, where she lived with Peter and their children. "He felt it was his obligation to take care of the family when his father died."
His family included a younger brother and sister (another brother was killed in an automobile accident) and his mother, Helen. The elder Mrs. Lewis owned 15 percent of the stock in the company, which by then was called the Progressive Casualty Insurance Company."In 1965," Lewis says, "my mother and I made a deal."
What they did was form the Progressive Corporation as a mechanism to buy out Progressive Casualty. Jack Green, who controlled Progressive Casualty, was starting to slow down. The Lewises got 80 percent of Progressive Casualty from Green in exchange for 20 percent of the new corporation and $3 million dollars. The deal was leveraged entirely by Mrs. Lewis's stock (which is what Lewis means when he says that his mother bought him his job).
When all was said and done, Lewis and his mother - who died several years ago, after remarrying - controlled Progressive Casualty through the Progressive Corporation, and Peter became CEO.
Thus began Progressive's phenomenal growth. In 1965, Progressive had net premium sales of $6 million. It went public in 1971, and by 1977, the company logged its net premiums at $77 million. In 1984, the figure hit $308 million. Last year, it skyrocketed toward the billion dollar mark. Since Peter Lewis became CEO, Progressive has multiplied its sales 130 times.
Although these numbers are indicative of Progressive's growth, they are a gross oversimplification of the company's labyrinthine financial and organizational structure. Progressive's property-casualty insurance line, which is sold through independent agents, is its bread and butter. Progressive is particularly noted in the industry for insuring high-risk drivers. Lately the company has expanded into insurance and risk-management services for the transportation industry - bus systems and truck fleets - and for financial institutions, assisting them in making sure auto-loan customers are properly covered. if Progressive discovers that a borrower is not properly insured, the bank can "force place" auto insurance on him - written by Progressive.
"Progressive has a way of being able to identify segments of the market that other companies miss," says John Garson, of Garson-Blau Inc. insurers, who has known Peter Lewis for 30 years. "It gives Peter a leg up on virtually every other competitor."
Pudge Henkel says, "Progressive is in transition. It's in the middle of a change from an entreprenurial effort into a major corporation."
The transition has been anything but smooth. And Progressive's internal growth pains are naturally not as apparent as the company's external glow. In 1983, for instance, Lewis fired Progressive's president of 13 years, Dick Haverland, at a crucial period in the company's growth. Lewis felt it was time to break Progressive up into nationa divisions and create division presidents who would operate autonomously Haverland objected, and as a result became superfluous under the force of Lewis's will and management philosophy.
That Lewis would take a valued employee's resignation as a personal snub is typical for a man of such staggering ego, but his almost childlike reaction belies any long-term vindictiveness. Lewis is both tyrant and coddler, rational and emotional - indeed, screwball and businessman - on such an exaggerated level that his psychiatrist must look forward to their sessions with dumbfounded fascination.
"The first five years of therapy were basically over-the-desk counseling," Lewis says, relaxing in the back of his Cadillac limousine one afternoon as his driver, Norman, cruises the East Side. As usual, Lewis is colorfully dressed. Over his conservative business suit and black topcoat, he wears a vaguely Oriental-looking silk scarf of blue and gold. On his balding blond head sits a black Western-style hat.
"I spent the next seven years in intense Freudian analysis. Then my doctor died. Now I'm in Gestalt therapy. it's funny ... I started getting counseling hoping that it would help my marriage. And it did.. The funny thing was that the more happily married I became, the more I wanted a divorce. Does that make any
It does if you're Peter Lewis, for whom true happiness means breaking, not maintaining, the status quo, even if it means ending his marriage, firing his long-time president, or, on the other side of the coin, passing out stock certificates to company clerks in the far corners of the field.
"Everything comes down to interpersonal relationships," he says. "That's what I discuss in therapy, whether it's my relationship with my exwife or my relationship with Dick Haverland" - or, as he told the Cleveland Center for Contemporary Art audience,
his relationship with himself. As Lewis gets further beyond the age when he feels his life should have been cut off, and as his company grows with him, he is developing an almost metaphysical attitude that says that life, business, art, and yes, love, are all the same. Maybe the real reason he is controversial even among Cleveland's new emerging leaders is not because he is unorthodox, but because he is honest with himself. That, by itself, is unorthodoxy enough.