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SIMON ROGERSON is musing on the forces that make good businesses behave badly. Take the financial services industry, for example. Between 2010 and 2014, UK banks paid out about the same amount of money in fines as they did in bonuses. It’s a statistic that gets to Rogerson.
“How does an industry behave like that? When you’ve had to pay £38.5 billion in fines and compensation, how can you think it’s right to pay yourself £32.6 billion in bonuses?” he asks. “It’s no wonder this is the least trusted industry in the world.”
For Rogerson, this kind of behaviour is an opportunity. He and his colleagues Chris Hulatt and Guy Myles were young graduates, working for one of the largest financial companies in the world, when they decided it was time for change. They had an idea: if they created a company that made it easy for people to understand what happened to their money, to feel connected to their investments and be confident in the results, customers would come.
And they were right. They launched Octopus in 2000, and it has since become a company with 700 employees overseeing £7.5 billion-worth of investment. It has also helped Rogerson and his colleagues hone a business model that has expanded into other industries, such as healthcare and energy, and is changing them from within.
There’s a common thread here, says Rogerson. All these businesses involve things that matter most to people, namely money, health and the environment. Yet incumbents in these industries tend to be a source of confusion and stress. The aim of the Octopus Group of companies is to give control back to the customers.
“We’ve been creating quite a stir in the energy industry, by lifting the lid on what has been happening for decades”
Rogerson still remembers their first investor who posted them a £9000 cheque back in 2001. Excited, Rogerson called them. “I don’t know what was going through my head but I said ‘You are our first ever customer’,” he recalls. “We spoke about the investment industry and what he believed was wrong with it. Things like ‘I find them difficult to relate to’, ‘I can’t understand the information they send me’, ‘this really matters to me because I feel responsible for my family.'” Now, 18 years later, this customer is still with Octopus, demonstrating the kind of loyalty that validates the company’s mission.
Rogerson believes people increasingly want to use their money to help make the world a better place – by creating jobs in small start-ups and claiming the tax benefits that come with this, for instance, or helping to generate renewable energy. “With this information, people suddenly want to talk about what their money has done, it becomes interesting and engaging,” says Rogerson. “And that builds a stronger relationship with the customer.”
Simon Rogerson, Octopus Group
Building these stronger relationships is a key part of all the group’s businesses. In 2011, for example, Octopus built a solar farm, the first of 154, and began selling green energy straight to homes in 2015. The company is now the UK’s largest investor in solar power and attracts growing numbers of people who want to help create a sustainable planet.
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