Executive Viewpoints

Gary Tubridy interviews Chris Perry
President, Americas at Thomson Reuters

Thomson Reuters combines industry expertise with innovative technology to deliver information to clients in financial markets. In the midst of the worst recession in memory, Thomson Reuters found ways to help clients improve their business processes, capabilities and insights. Result: Thomson Reuters has managed to grow revenue and share over the past 24 months. Gary Tubridy, Sr. Vice President of The Alexander Group speaks with Chris Perry, President of Americas Sales, Marketing and Services at Thomson Reuters to learn more about the role of the sales organization in this success story.
 

Gary Tubridy: How has the tough economy affected you and what steps have you taken to deal with it?

Chris Perry: Our business is right in the epicenter of the crisis. We serve capital markets. We serve training communities, and investment banking. It has been the place that has gotten the glory in the past years and now it has had a really rocky time.

Asset managers have lost 40 percent of their assets. Our clients have really struggled. What we have tried to do is work closely with them to determine what we can bring to the table to help them through the crisis.

Our broad product line helps us there. We try to bring components together to deliver solutions in areas of their business where they are cutting back. Many clients have decided that they just cannot spend money as in the past, but they prefer not to lose too much capability in anticipation of the recovery. That’s where we can help. So the downturn has brought about deep engagement with clients.

We hope we have helped them use this crisis as a stimulus to reinvent some of their business processes and what services they purchase. Our hope is that the economy is turning and we are at the beginning of a recovery. I was in Canada just last week where they have determined that their recession was over. But most of our US clients, while optimistic, are still waiting to see. We are working with clients to get them ready for the turnaround.

And in some cases I hope we have helped them reinvent how they make money. I was recently with one top tier broker dealer who we have been helping grow the top line using several of our services. It is all about being smart right now, working closely with clients, preparing for recovery, ensuring that they have not lost their place in the marketplace.
 

Gary Tubridy: We have heard similar strategies where in difficult times, instead of simply discounting to keep the business, sellers engage in a more robust conversation with the clients about how their products can enhance both the top and bottom lines. This is a “share of wallet” strategy.

Chris Perry: Absolutely. Clients tell us that the expense pie has to shrink. They say we are very comfortable if you expand your share of the pie as long as the overall pie shrinks. Those providers who have both creativity and expansive offerings with global capabilities like Thomson Reuters can be real benefactors in such an environment.

We want to win the market share war and do that through a level of flexibility and engagement with clients. That might mean some discounting where appropriate. More likely, it is helping clients refine their spend. Many of these organizations have gone through downsizing so it is difficult to justify too much increase in spend on our services. You need prudent and fair engagement with clients.

We work on how to displace boutique providers that sprang up in the strong pre-2008 economy. We found that, in a number of cases, there was overlap between services we provide and those which boutiques provide. So we have leveraged the concept of project management and Six-Sigma engagement to thoroughly go through their purchasing, assess their business needs now and into the future and determine where we fit.

We have brought capabilities into that conversation that helped support the sales teams in a unique way. We bring project management expertise and discipline to run a process that sales people participate in and leverage. We also bring in subject matter experts that deliver knowledge to our clients while sales teams drive the commercial side of it. It has been interesting, creative, and successful.
 

Gary Tubridy: So you utilize the resources available to an organization of your scale that may not be available to some of your smaller rivals?

Chris Perry: We think that is absolutely the right way to do it. There are in our industry five or so very large players and then there are so many small niche players I could not even tell you how many there are. 

As a big organization we must innovate. We have got to be at the forefront of where the markets will be and where our clients’ needs will be. That comes from working with them and understanding what they are seeing around regulation, transparency and risk.

These are key subjects right now as the industry is being reinvented. We are investing in understanding what our clients’ needs will be and building the solutions that will fit with them.

We are doing that very aggressively while a number of competitors have hunkered down and are protecting cash. They are not investing because they want to see which way things turn.

The key for us is to not lose that time. We will operate more nimbly because that is what’s required right now - immediate and creative responsiveness to client needs. While it is starting to look a little better, we’ve got to help them get through what might be another difficult year.
 

Gary Tubridy: Chris, you are bringing together two organizations and that always represents a challenge. Yet in doing so, you are certainly able to offer a broader, more robust set of solutions to your clients. Can you talk a little bit about that?

Chris Perry: Bringing two organizations together through a planned process turned out to be exactly right for us. We did not realize how right it was at the time.

The economy, to some degree, has helped us because our people have looked inside the company and found this to be a pretty good place. We have had excellent retention rates, which is not typical in a merger of this size and scale. Our culture is solid.

We had a great state-side company in Thomson and an excellent global information news provider in Reuters. These were very, very complementary assets.

So during this difficult crisis, while the analysts that cover us had projected us to be down three or four percent on revenue, we have actually been positive throughout the entire crisis. That is because of a lot of hard work from our staff. There are clients like Lehman and Bear Stearns that do not exist anymore. Yet we overcame that and we have continued to grow our top line. We are down from seven and eight percent growth rates to less than one percent but we are still growing. We’re pretty proud of that. 

But the crisis is not over. We’ve still got to manage and wrestle this situation. I am not sure if we will be able to hold the line and grow all the way through, but we have had great success in leveraging growth markets like Asia and Dubai which we hope to continue. And we’ll keep innovating with product too. For example, with our Thomson One product line, we have brought in other offerings like Reuters News. That has helped our clients become more effective and allowed them to consider discontinuation of competitor services.
 

Gary Tubridy: Chris, you touched on the word culture. I wondered if there were words that you would use to describe the kind of culture you are building by bringing two great organizations together.

Chris Perry: We are really bringing a culture together that had some great foundations on both sides and then we are turning it up a notch. We are focusing on collaboration with our clients and putting them at the forefront of everything that we do and think about. That can seem trite but literally in our business we are getting everyone, including people in the accounting department, to think about how they can help our clients be successful.

We are trying to drive that theme throughout the organization. It trumps everything else. Clients want to do business with a company that puts them first, where you actually enjoy the experience. That is the mantra of our organization.

We have a huge focus on innovation. We talked to our clients and found they were worried we were becoming too big and that we would stop innovating. We took that to heart and we have been investing in more innovation. We have spent a billion dollars on innovation this past year alone that will benefit our clients downstream.
 

Gary Tubridy: That is a big number.

Chris Perry: It is a huge number. It is spread across a number of exciting things, including a transformative product line at the desktop level that will be out in the first quarter of next year.
 

We have innovated on what we call Reuters Insider, which is a narrowcasting program. We think that the idea of broadcasting like the networks do is a thing of the past because the world is now living in TiVo land where they choose what they want to watch and they skip the commercials anyway. They only want to watch what is interesting to them.

So we have applied that theme to the professional market place with a product line that links in to the work flow of an end user. If they are a commodity or energy trader then we are going to provide them with multimedia, narrowcasted to them based on their interests.

We are launching a very powerful search engine that has the ability to search, in context, both the public domain and the proprietary contents of Thomson Reuters and third party data bases that only distribute through companies like us.

If you go on to Google and do a search on gold, it comes back with gold paint, gold cars, gold stocks, gold bullion, gold everything. We have an ability to get much better context on that search, providing more value more quickly. So these are a couple of examples of our innovation agenda.
 

Gary Tubridy: As we have explored well-run sales organizations, the idea of creating a winning culture is central to making your company a destination place for high-performing sales people. Good performers want to work for good organizations.

Chris Perry: Yes, absolutely and let’s focus on that for a moment. Talent is the key. Raising the bar on people is the key. Another benefit of bringing Thomson and Reuters together was that we had a very, very high quality labor pool available to us.

We actually had some duplication. We did not need as many people as we had. So, we right-sized the organization and took the top talent. We created a superbly talented team and a culture of performance.

We have taken advantage of this economy, which has displaced good people from very good companies, and brought them in too. We are trying to drive a culture that serves clients by attracting and enabling great people.

We are very oriented to people development. We have spent a fair amount of money this year, 2009, on training. We have a Major Account Manager program where we have done some very intense training that includes bonus payments for their accomplishments. We did a multisession, off-site program that started in March when a lot of companies were cutting out training entirely.

We felt it was important to get our top sales people away from the office and really do some intense training. In June, we implemented a second wave of training, which built on the first round. It culminates with a certification round in October. There will be a panel of judges including some outside professionals who will judge their performance. Those that make it will get both certification and a bonus. Those that do not certify will be relegated to a lower-level role and will need to try again next year.
 

Gary Tubridy: We looked at companies that, in the midst of the economic turmoil, were still able to grow and we compared them with companies that were flat or contracting. There were some interesting findings that came out of that. One was that the growth companies kept investing in sales person training and first line manager training. They refused to squeeze those budgets because they believed in their importance.

Chris Perry:  I could not agree more. That has been a philosophy of our organization. We had the benefit of the companies coming together. So we had a strong capital foundation. I understand some companies were worried about survival and had to cut everything except for the lights. We were not in that position.

So we have really invested and I am very pleased to hear that your research supports continuing growth during downturns comes from investment in the people who ultimately translate their efforts into a focus on customers.
 

Gary Tubridy: The bottom of the recession seems to have been reached and a turnaround is perhaps within our grasp. Are there some things that you are doing with the sales organization to ready it for the turnaround?

Chris Perry: Absolutely. We are not resting on any of our laurels here. We have seen our competition report negative growth. We have been reporting positive growth, slim but positive growth. So one could argue we are doing pretty well.

We need to keep up the pressure. Right now we are engaged in a review and transformation of our sales and service organization along with further segmentation of our client base.

Our review asked, “Who is spending money with us?  Where has our growth come from?” We realized that we have got 40,000 or 50,000 clients. The top 1,500 represent a huge amount of our book of business and a huge amount of the growth opportunity.

From 1,500 to 6,000, we have a strong opportunity for either growth or retention depending on our current situation. Today, we have not deployed enough of our total resources against those opportunities.

As well, we have not established a sales and services model to cover the long, long tail of clients we have from say 6,000 or 7,000 to 40,000.

So we are doing some transformation that implies both organizational change and new tool sets to make us more capable of servicing that long tail. This includes elements of automation, self-service, and other mechanisms. Our approach needs to consider what we would use today if we were starting a brand new company.

Service also needs to be delivered fluidly and flawlessly. This will involve a complete reinvention of our client training. Clients will do a lot of that themselves because that is the kind of world we live in today. So we are not standing still. We have an 18-month plan that we have started to deploy against. We have done very well but we cannot stand still. We will be ready for the rebound when it comes.
 

Gary Tubridy: Many top sales leaders tell us that the minute you get comfortable with where you are, is the minute that you start going backwards.

Chris Perry:  That is such a great point. When you are in the middle of difficult times and traveling to all your offices to make sure you are seeing your people and keeping them motivated, it is hard to contemplate the work involved with any kind of transformation.

Then you realize it is simply necessary if you want to stay at the front of the game. You have got to figure out a way to put in the time and you cannot rest on your laurels. You have got to manage change thoughtfully instead of reacting to it.