How Progressive insurance lost what made it progressive

Now it had come to this: laid off at the age of 44, just in time for Christmas.

Lantzy was one of more than 340 people to receive pink slips in November. Facing a plummeting stock price, declining profits, and a losing advertising war, the nation's third-largest auto insurer was faltering. The "reduction in force" was supposed to trim the fat.

But two months after the layoffs became public, the company bought the naming rights to Jacobs Field. It was a savvy marketing move, perhaps, but one that angered both Indians fans and employees, who saw the $50 million advertising buy as an insult.

Suddenly, one of Greater Cleveland's best employers, a beacon of stability with 9,400 jobs, became a target of ridicule and resentment. While Wall Street analysts may not have been overly bothered by the slump, Clevelanders couldn't help but take it to heart. The region doesn't have many Fortune 500 companies left. If Progressive stumbles, where does that leave us?

In 2000, Peter B. Lewis was headed through security at the Auckland, New Zealand airport when drug-sniffing dogs discovered an ounce of pot in his briefcase. The 66-year-old billionaire philanthropist, who had recently had his leg amputated, endured a cavity search and a night in jail. This is the man who built Progressive.

Raised in Cleveland Heights during World War II, Lewis took over his father's company in the '60s and grew it from a small outfit to a national name brand with 27,000 employees nationwide. Around the Mayfield campus, "Peter B." was a deity.

He hired bright young people and gave them the power to make decisions. They were encouraged to question authority and be honest with their customers — a novel approach in the insurance world.

Under his leadership, the company earned a reputation for innovation. In the '50s, it started insuring high-risk drivers when no one else was interested, and those customers helped business explode. Then, in the booming '90s, Progressive became notoriously efficient. Independent insurance agents could send a customer's information to Progressive and get a policy faster than anywhere else.

It was one of the first companies to sell insurance online. It launched 24-hour phone lines, and even took the unusual step of providing customers with quotes from competitors.

Meanwhile, employees were treated royally with on-site gyms and doctors' services. Lewis' ex-wife, Toby, helped build what became one of the most impressive corporate art collections in the world.

New ideas were welcomed, and if you worked hard, it paid off with promotions and prestige.

"[Lewis] treated his employees as assets to the company and as real human beings," says one former employee.

"There was just a camaraderie," adds Lantzy. "You took care of them; they took care of you."

Lewis was so dedicated to the company that he told a reporter his fantasy was "to be carried feet first out of my office." About eight years ago, thanks to circulatory problems that led to partial amputation of his leg, he ceded the spotlight, resigning as CEO. These days, he enjoys his private jet and homes in Beachwood, New York, and Colorado, and spends nearly half the year on a luxury yacht overseas. Renowned for his love of art, women, and weed, he makes a habit of giving the finger to Cleveland's civic establishment, withholding donations from institutions like Case Western Reserve and University Circle if he decides they're poorly run.

He's still the chairman of Progressive's board, but when he departed, he made Glenn Renwick his handpicked CEO. Some employees say nothing has been the same since.

"Until the reorganization was announced, I could've written a commercial for how much I loved Progressive," says one veteran manager.

"Everybody wanted to be there," adds another longtime employee. "Now it's quite the opposite."

When contacted by Scene, most employees were afraid to speak publicly about the company. Some fear they'll be fired. The laid-off still have friends and family on the job. And Progressive, they say, is no longer a place where people are encouraged to speak openly.

In the years after Lewis left, new layers of management appeared. Analysts and MBAs were hired to examine processes and procedures, rather than bring money in the door. "Things quit getting done," one former manager recalls.