Thomson Reuters CEO James Smith charts a path to high growth

James Smith (photo) sees his task as chief executive in three distinct phases.

“The first is we lost market share for five consecutive years in a declining market. That was a tough place to be. Job number one was stop the bleeding, don’t let the ship sink. We have definitively completed that phase. The ship isn’t going to sink,” he told members of The Reuter Society at Thomson Reuters’ London office.

The second phase was about building what Smith called a scaleable platform to support future growth. In doing that the company had “dialled down” the acquisition activity that it had historically done on the Thomson side especially, and had begun working to consolidate its technology and content platforms.

“We’re probably half way into that process of getting the most critical platforms consolidated. We’ll be working on that for years and years and years to come as we continue to consolidate,” he said.

“The third phase is how do we invest for high growth. Where’s the growth going to come from that’s going to drive the profitability and fuel the continued vitality of the organisation? We’re beginning that now.”

Smith said the company was probably half way or perhaps a little more through the second step and had begun the planning and the work on the third step “and frankly that’s the most exciting part. You know, it’s really good to come to work every day and to look at where the growth opportunities are going to come from or how we’re going to tackle them.” He described it as a journey and said “we’re making solid progress on it”. 

Smith, by his own account a legacy Thomson man, also spoke of how “that incredible Reuters brand” opens so many doors. “It’s astounding really, the licence that gives us to open any door anywhere around the world.”

In a world of information “exploding on the Internet and social media”, Smith said he believed that the authority and credibility of verified news, of knowing that it’s right, is going to be ever more valuable in the future.

“What is it that holds this organisation together? It’s all about trust. It’s about the trust our customers have in us to get it right, whether it’s a news story, whether it’s a bit of market data, whether it’s the fact that you’re citing the current precedent in common law when making an argument in court in negotiations, whether it’s conducting a trade and knowing you’ve got free, open, transparent pricing and you’re getting the best price. So trust underlies everything that we do. We’ve defined our purpose to say that we’re trusted for the decisions that matter most… empowering our customers to act with confidence in a complex world. And I really believe that, and the heart and foundation of that trust goes back to everything we believe about the journalistic values and ethics that the company was built on… There’s a 165-year tradition of doing that. I think it’s a culture that’s supported by the Trust Principles, Trust Principles that the Thomson family didn’t blink in saying yes, we adopt those Trust Principles to apply to the whole company because they simply describe the ethics and values that we engender in our business as well. It’s something that I think is really of benefit to our organisation.”

Talking about the 2008 Thomson acquisition of Reuters and how it has worked out, Smith said: “What I know for a fact is the global organisation that we picked up, the breadth of content, the customer relationships, the global size and scale that we acquired with Reuters has given us a really solid foundation to build the company that we have today.”

Investors are growing in confidence in the company’s stock every day as reflected in the share price; customer relationships are stronger than they have ever been; employee engagement scores are moving in the right direction and showing marked improvement across the company in the last quarter.

“We also measure a number of metrics that reflect what we believe to be organisational health and they’re all moving in the right direction,” Smith said. “I won’t pretend to tell you that we’re done, I won’t pretend to tell you that there’s not a lot of hard work that lies in front of us, but I believe we’re headed in the right direction and I think we’re all looking forward to building upon this legacy and thinking about what the next generation looks like for this incredible company.”

David Craig, president of the financial and risk division that produces more than half of group revenue, also spoke to the Society.

He reiterated that the main priority had been to restore trust. “We had failed on some technology roll-outs, we had reorganised our sales team and done it poorly, we’d lost the trust of our customers. We were in quite a bad, difficult situation. What I realised was the secret to turning this company around was: number one, winning back the trust of our customers and I must say that this journey would have been impossible without them. They admire this company, they want us to win and they like what we stand for, and it’s really important to hold that as your top priority.”

Asked about Thomson Reuters’ market share compared with that of arch-rival Bloomberg, Craig declined to give a figure. He simply said “We’re doing well.” ■