Kate Armstrong: profile of a PhD student

Kate Armstrong is central to the Admiral Group, and as a full time PhD student she continues to be a member of the group’s Board. She was the founding CEO of the group’s comparison website, Confused.com, and was the inspiration for the company’s wild haired mascot, Cara.

 The first impression Kate Armstrong gives is that she is surprisingly down to earth and quick to laugh. The second impression is of a woman with formidable intelligence and drive. These two sides of Kate Armstrong seem to exist in the Admiral Group itself, a company that focuses intently on the bottom line, but invests a great deal of resources into ensuring that the staff are happy – even setting up a ‘Ministry of Fun’.

“It’s a very innovative company but it’s also a very numeric, analytic and rational company – if it moves, measure it. And it has the paradox of also being a playful, happy, friendly sort of place.”

Armstrong and the Admiral Group

Admiral is a hugely successful organisation that showed a 47% increase in revenue in 2010. Armstrong attributes the company’s success to a culture of innovation, drive, and staff satisfaction.

“We’re a group of people that tries not to sit on our laurels. I was in a board meeting last week and we looked at our achievements and said, ‘We did that, well done. But why are we only reporting profits so that they’re coming in at 10%, instead of what the market is expecting, which is 20%?’ We’re always beating ourselves over the heads with sticks. So it’s this kind of incredible optimism you have about the business, against this quite negative attitude – dwelling on your failures, dwelling on the things that have gone wrong. It is the only way you’re going to learn. “

Resting on her laurels is an accusation that could never be levelled at Kate Armstrong. At Admiral, she was the driving force behind Diamond Insurance (1997), the launch of the first internet-only insurer elephant.co.uk (1999) and most recently the first aggregator, Confused.com. She holds an MBA and is now nearing completion of a full time PhD in Strategic Management at the University of Glasgow under the supervision of Professor Robert MacIntosh. Her PhD research is looking at high performing firms and is focused on dynamic capabilities and the ways in which these drive competitiveness and innovation.

“I’ve always wanted to do a PhD. When I was doing my undergraduate work in Australia, I wanted to do a PhD in biochemistry and I found a supervisor at the Australian National University but something happened with my grant and there was no money coming.

“Later I did a part time MBA, through the Open University, which I finished in 2000. I realised I still liked academic life, even though I was not doing it in biochemistry anymore. That was when I decided I’d quite like to do a PhD.

“With work, there was an opportunity to take some time out. I wanted to spend some time with my teenaged kids before they started saying ‘you embarrass us – I don’t want to be seen dead with you’. So I could still have some input and some fun with them. So I started my PhD at the same time. I found Robert who seemed to have some interest in the subject areas that I was interested in, in strategic management.”

Armstrong’s research centres on a single case study – the Admiral Group, which presents special challenges for someone who remains central to the organisation.

“I hear myself asking questions during an interview or conversation that may be seen as leading questions, but I know there is no secondary data backing up something I’ve heard them say six years ago, so I have to say, ‘I remember you saying this,’ and then I get them to talk about it. But it’s reflecting on that and trying to show that you’re not putting words in people’s mouths other than prompting them. So that has been quite a difficult piece of learning that I’ve had to do as a researcher. It’s much easier to look at numbers and run an analysis.”

Dynamic capabilities

According to Armstrong, the subject area of dynamic capabilities, which is the focus of her thesis, is allconsuming. There is a large body of quantitative work on dynamic capabilities in the strategy literature. The theory is out there, but someone needs to take the next steps.

“In the last 10 years the research seems to be going around in circles. It’s very hard to get into dynamic capability if it lies, as I suspect it does, right within the tacit part of the business. It’s not even recognised, it’s just ‘what you do.’”

Armstrong believes that the key to dynamic capabilities lies in the people who make organisations successful; in the personality and behaviours of the key managers who shape the way an organisation develops. But if the traits aren’t formally recognised, then the organisation is in danger if that person leaves.

“It’s about traits and behaviours and you can then see evidence that they are routinized or codified in certain ways and that becomes the dynamic capability that people externally might see and identify.”

Part of the benefit to focusing on Admiral is the success of the organisation, and Armstrong has been able to find clear, effect examples of dynamic capability. The organisation works hard at what it does well. Dynamic capability isn’t defined internally, but the organisation is focused on what is important to the people at the top. A major part of that is illustrated with the company’s work philosophy: People who like what they do, do it better.

“The culture doesn’t just happen at Admiral, it is one of the things we do explicitly manage through our Ministry of Fun and our expectations of our managers, and therefore flowing through our staff, are made pretty clear. They are not codified per se, but it is a constant.”

Happy people add to the bottom line

One important benchmark for the company is its performance in the Sunday Times’ Best Places to Work and the Financial Times’ Best Places to Work in Europe, in which Admiral has been participating for a decade. Management at Admiral are not focused on the company’s actual ranking result, but in the feedback that comes out in the survey results.

“The data we get back from it, which is what the people actually say about working with us, that is of interest to us, for our company, for how we measure what we are doing. Happy people add to the bottom line. Our Chief Executive really feels strongly about that and it’s the whole ethos of the company, that if you are having a good time, you’re motivated, you want to come to work, and you share the vision of the company.”

This culture, according to Armstrong, has remained the same from the beginning, through extraordinary growth and through flotation on the stock exchange in 2004, when many high level managers took the opportunity to sell their stock and leave the company.

“We replaced quite a few senior managers, some of them internally, some externally, and that was a ‘crux-point’ for us, when, according to my thesis, it could have all gone pear shaped, with us losing the traits and behaviours behind our success. But it didn’t because there were still the key founders in place. They were involved in choosing new staff and we developed a great group of people. I think the management team is stronger now than when we floated.” Armstrong’s plan is to take these insights she has gained from focusing her research on Admiral to look at other companies – but she is firm that it will be from an academic perspective.

“I want to make a contribution to academic life. Once I’ve got my PhD, I plan to take some of the learning from that and push that insight along to see if it can give us some clues as to how dynamic capability works in other companies.”