The story of Thomson Reuters

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0:41We look forward to seeing you there. The story of Thomson Reuters begins in 1850 in Arken, Germany. In that year, a man called Paul Julius Reuter started sending news and information about share prices between Arken and Brussels in Belgium. He used pigeons to do it. 45 trained birds were sent to Brussels on a train and then flew back to Arken with the latest news. Reuter then moved to London and in 1851 opened an office at the Royal Exchange Building in the heart of the city. Using his expertise in telegraph links and carrier pigeons, he started sending news and share prices between London and Paris.

1:24Reuters was born. Since then, this news organisation has been the first to tell the world about the sinking of the Titanic, the construction of the Berlin Wall and, in more modern times, the news that Mark Zuckerberg was planning to float Facebook on the stock market in New York. In 2008, the Thomson Corporation bought Reuters for$17 billion, about£9 billion at the time. Thomson, a Canadian business, had built a publishing empire covering law, tax and other specialist areas. This deal created Thomson Reuters. Today, this combined business is worth$85 billion.

2:11I'm Graeme Ruddick and this is the Business Leader Podcast, where we look at the stories and strategies behind modern businesses. In this episode, we're looking at Thomson Reuters. To do so, I've come to its offices in Canary Wharf, London, to meet Steve Hasker, who's been Chief Executive since 2020.

2:36I spent just under a dozen years at McKinsey, and I did a lot of work sort of in the tech, in the media, and in the business information services sector. and I never served Thompson Reuters, but I had studied Thompson Reuters and the different franchises that TR had at that time. And I was always fascinated by the business. So that when, at the end of 2019, when I was called by the representative of the Thompson Reuters board, you know, and sort of asked, would I be interested in interviewing for the job? I jumped at the opportunity because I did have a bit of a sense for the quality of the underlying assets.

3:10Tell me about the history of this business, because it's so multifaceted. I mean, And people will obviously know the Reuters brand, but as I'm sure you – I know you've said many times, Reuters is only 10 % of this business. This business is way more than just the news brand. So for people who are keen to understand more about Reuters, Thomson Reuters, could you just explain the sort of business? Yeah. So the Thomson Reuters business comprises a couple of different components. The first is what we call the big three, which is about 80 to 85 % of our commercial activities. And that's content-driven technology provided to lawyers, tax accounting professionals and auditors, and risk fraud and compliance professionals and law enforcement.

3:56So those are sort of the main service lines and end customers. And we sort of organize that into legal professionals, tax and accounting professionals, and corporates. and within legal professionals includes our work for government, predominantly law enforcement. And so that's 85 % of business. We also have a global print facility, which still prints legal books and other titles. And then of course, we have the Reuters News Agency, which is a bit less than 10 % of the business. In terms of the history of the company, it sort of depends on how far you go back. So here in London, I think one of the original assets was a legal content asset called Sweet and Maxwell, which was started 250 years ago.

4:38Reuters, of course, was started by Julius Reuters here in London 175 years ago. Roy Thompson started the Thompson Corporation, I think in the 1930s, although he really started to build momentum in the early 1960s, when he bought newspapers and then radio stations and TV stations. And then his son, Ken divested some of the legacy media assets and invested in information services. So the West Publishing, the tax and accounting businesses. And then under David Thompson, our current chairman, we've really sort of focused on the big three as well as Reuters and print. The Reuters trust principles date back to the 1940s.

5:23Can you just talk about how they came about and also why they're still so important for the business? So I think it was in 1941 where the Reuters board put together what was called the Trust Agreement and is now called the Trust Principles. And essentially it was the result of the pressure that various news agencies within Europe were coming under from their local governments. You know, in a sense, I think the various governments at the time were trying to sort of co-opt the news agencies to tell a particular version of current events. and the Reuters board at the time to their credit said no no we need to sort of step above the fray here and we need to provide independent fact-based news that's free of biased so in other words to tell both sides of the story not to take a side and for over 80 years that's what Reuters has been doing and so those trust principles govern everything we do not only at Reuters but also Thomson Reuters and ensure that, for example, the Reuters news that you read on reuters.com or through any of the distribution outlets will be triple checked and it will be only fact-based news.

6:32It won't involve a narrative or an opinion or a bias of any kind. And then similarly, when a customer buys Thomson Reuters content-driven technology, including AI, we will be transparent about the inputs to that AI model and how that model is trained, and therefore the basis on which that information is put together. Why is, if you just take the Reuters business, why is that business, given it's only less than 10 % of revenue, why is it still an important part of Thomson Reuters? For a couple of reasons. I mean, firstly, it is the principal news provider to the London Stock Exchange Group, who are a very important customer of Thomson Reuters.

7:10And then secondly, I think we're very proud of the work that Reuters does, and not only the Pulitzer Prizes and the various awards, but also the fact that Reuters covers the news globally where it's difficult and dangerous to do so. And then thirdly, that's very energizing for our young talent. And we compete against the biggest tech companies in the world for software engineers or data scientists. In many cases, they will choose Thomson Reuters because of the Reuters brand and the Reuters Association. Since becoming Chief Executive, Steve Hasker has worked hard on getting the different parts of Thomson Reuters to work more powerfully together.

7:49In his words, this has meant evolving the company from one with a portfolio orientation into a truly world-class operating company. A backdrop to his tenure has been the rapid development of new artificial intelligence technology. That has the potential to transform the Reuters newsroom and all the industries that Thomson Reuters operates in. You know, we went through that change program and I think the timing, in a sense, was fortuitous because no sooner had we finished that change program than along came CHAT GPT-4, you know, passed the bar exam in the United States and really looked poised, and I think still does, to help transform the legal profession and in turn the tax accounting and order professions and eventually sort of risk, fraud and compliance and law enforcement.

8:37So we've been fortuitous insofar as we did all that sort of work to get fit and to reinvent the customer experience just in time to be able to invest heavily behind a transformative technology. And it's worth remembering that Thomson Rogers has been in the AI business for over 30 years. So we put a functioning search algorithm on the front of the Westlaw database in the early 1990s, before Westlaw was commercialized. And as a result, the pivot toward AI and injecting generative AI into our flagship products, buying other AI products and building others from scratch, is not an entirely new motion for us.

9:20And so that's really been a huge part of the initiative over the last 18 months, and will continue to be for the foreseeable future. And it's both ensuring that we lead the world in terms of the application of content and AI-driven technology for the professions we serve and also making sure that we use those technologies exhaustively throughout our business, whether that's within each of the big three segments, within the Reuters newsroom, all the way back to our functions like HR and finance and communications and legal. And so, you know, it's pretty energising to sort of on the back of our change programme to now be trying to lead the way in terms of what I think everyone accepts will in one way or another be a transformative technology.

10:03In terms of the development of this transformative technology, where are we in the curve? Oh, we're early. You know, I think I met with a customer this morning who manages one of the global large law firms, and I asked him this question, where do you think we are? If this is a 10-chapter story, he said we're in chapter two or three, and I agree with that. I think we had the initial chat GPT sort of foray and acceptance. We then had a series of other predominantly US-originated foundation models come in and into the space and compete and compete effectively. And then we had the deep-seek moment where it sort of proved that this was not only a North American phenomenon, that we were going to see significant innovation from other parts of the world, including China.

10:48I think we're now moving into the world of agentic models, where the models can perform multiple related functions in sequence and in parallel to come up with sort of more, perform more complicated tasks and solve more complex problems. I think, you know, the sort of the deep research is now coming at us, extensions into multimedia, you know, into video and into voice and imagery. And so, look, we're just at the start, you know, and what we're seeing amongst our customers is many are really starting to sort of invest and innovate. And then I think the majority are probably still in experimentation phase.

11:33Compared to the technological breakthroughs of recent decades, the internet, computers, I mean, how does this compare? Yeah. So I mean, I, you know, I've been lucky enough, as I think many people to, to have worked through the advent of the internet, of mobile and social, of cloud, and now generative AI, in my opinion, certainly for the professions that we serve, this will be more transformative, because it's not just a change in format, it's not just a change in, in, in sort of the location of data residency. and not to minimize any of the other disruptions, but this one has the ability to transform the way professional work is done.

12:19So, you know, it is quite conceivable that large parts of the underlying drafting of contracts and opinions of briefings, large parts of the research and the construction of arguments will be performed by AI-driven tools within the legal profession. It is certainly on our roadmap that an end-to-end tax return and the triggering of financial advice will be performed by AI-driven tools. And so just within the sort of the legal tax and accounting professions, I think a large amount of the underlying work can and will be automated, which is going to transform the professions. it's going to make those professions on one end more satisfying but also really challenge the kinds of skills that professionals bring into the workplace and need to survive and thrive relative to perhaps the last few decades.

13:16How do you think it will change media and the newsroom? So we're under Alessandro Galani's leadership we are investing heavily in ensuring that our journalists that our photographers and videographers and editors have access to the very best AI tools. So for example, and there are many, many examples, as thousands upon thousands of companies issue press releases, the AI tools can sweep through those in a matter of seconds and discern what is real and what isn't, take the summary of that, do a fact check, have ideally a human in the loop to make sure that it is real news, not fake news, and then put it out of the newswire.

14:02And so it's able to automate or largely automate enormous amounts of that sort of real-time news generation and distribution. And then similarly, for some of the more investigative work and the more of the sort of storytelling, the AI can produce a first draft of an article. and then it's up to a journalist to say okay apply their judgment and their network and their their writing and communication skills to take that to a level that's that's ready for distribution and is at Reuters quality but you know it's certainly it ought to increase both the productivity of a journalist but also the job satisfaction as they get to sort of do you know add more judgment and add more value, in a sense, to the story rather than have to sort of grind through the first draft process.

14:56Just to clarify, is this your own technology that you're developing? Yes, we've developed a technology called Fact Genie, which has been applied successfully late last year and this year to the newsrooms. And how much is the business, not just in the newsroom, but Thomson Rogers more broadly investing into AI? So we spend about 200 million US dollars a year in cash. So that'll be both OPEX and CAPEX. But it's to ensure that the very best AI technologies are embedded in our products and that which our customers experience. And also that all of our employees, including our journalists, editors, videographers and so forth, have available the best tools.

15:37In addition to that, we've spent about$2.5 billion over the last 24 months on various acquisitions of predominantly AI-driven tools. One of those, a business called SafeSign, which was developed at Cambridge University and Harvard University, we think is the leading developer of small language models dedicated to the legal profession. so it's early days for SafeSide but we're very optimistic that Jonathan Schwartz and his team will be able to develop models that can outperform the general purpose models as it pertains to the work of a lawyer. How important is it that you develop your own tools and within that I understand that you've got a very high priority on protecting data higher than others have.

16:19How are you doing that and also why is it so important? Yeah so look we don't think that that any company including Thompson Reuters needs to own every single aspect of the value chain, you know, from the sort of foundation model to the underlying content to the sort of AI skills as they're written and developed to the prompt engineering and distribution and so forth. However, we do believe that we bring to this sort of era a couple of very significant assets and advantages. And one of them is our unique and proprietary data sets and our content, which has been generated over decades by thousands and thousands of professionals.

16:58And we will protect that because it's been a very significant investment over time. It is, we believe, an advantage. And so there'll be various ways in which we apply that to our AI technologies and others, but we'll endeavor to ensure that the copyright associated with that is respected. And is that the case as well for customer and client data? Yeah. I mean, I think, you know, the sort of promise that we make to our customers, which many of our competitors don't, is that their IP will not become part of our AI output. And that is very, very important. Again, their IP will not become part of our AI output.

17:43And essentially what we're assuring them all is that their IP will not be used to train our models. and maybe more importantly will not leak into the hands of their competitors or others because I think this is the sort of, you know, the great risk with working with an AI system or an AI tool that doesn't respect that sort of data privacy and protection, that isn't governed by the trust principles, that a highly trained professional will enter into that tool some information about their firm or a client that then a competitor can access by using the same tool by asking a similar or related question of that tool.

18:26I mean, that is radioactive as far as we're concerned. We wouldn't do that to our customers. And we certainly think that, you know, in every conversation with customers, we make clear sort of what the parameters are for us and therefore what the risks they might be running could be, you know, if they use some of these more open source type tools. What do you think it will take to sort of win during this period? And is Thomson Reuters well positioned because of the trust? Yeah, I mean, we think that the combination of the trust principles and this unique and proprietary information across the different professions we serve puts us in a good position.

19:01I would say, though, it's early. You know, I think this will be a sort of a multi-year period of transformation. And I think, you know, a number of leaders are emerging in this first phase. But I think it's too early for anybody to declare victory. Steve Hasker grew up in Australia. His father was an engineer and businessman, and his mother worked in social care. Before joining Thomson Reuters, he was a partner at McKinsey and was able to travel around the world with his job. He also had spells at Nielsen, the consumer group, and TPG, the private equity firm. My career is now, by and large, 30 to 35 years in.

19:42And so lucky enough in that period of time to be offered various roles and have a chance to think about different opportunities. And for me, the sort of North Star or the guiding light has always been answering the question, do I think I will learn more by saying yes to that opportunity than that which I'm currently doing? And if the answer is clearly yes or largely yes, then I've taken the opportunity. And that for me has been, I think, a better guide than title or promotion or pay rise or, you know, sort of anything of that nature. because, you know, I think it is a learning process. And I think the more that any of us can learn, the better equipped we'll be to be successful.

20:25I also think it opens up more opportunities going forward. How has your sort of global experience helped? Because you obviously grew up in Australia, you're working based in American Canada, but also working across the world. How does that perspective help you, particularly running this business? I mean, I think it's a, I think it's been a great advantage for me. I really do. And it sort of, you know, as you say, I grew up in Australia and every couple of years for my parents' jobs, we moved. So, you know, within Australia, admittedly, but sort of got that experience of sort of being uprooted and having to join a new school and meet new people and make new friends and so forth.

21:01And then I was lucky enough to spend a track and field season competing in South Africa. So I lived there for a little while. When I was at graduate school, I did an internship in St. Petersburg, Russia. When I was at McKinsey, I was based in New York. I spent time in Australia and the UK, in Portugal, and in China and India. And Nielsen were making pretty big investments in China and India during my time there. So I spent a good chunk of time in those markets. Nielsen's international TV business is based in Milan and Italy. And then, of course, CIA, when I was there in my private equity phase with TPG, were investing in China.

21:44And now TR, as you said, is in 70 to 75 countries. And so I feel like I can go to most places in the world, or at least most commercial centers, and be relevant. You know, sort of have a bit of an understanding of the history of the way things work and of the sort of personalities and culture that prevail. and not only is that very satisfying, I think it's also very helpful in a way that perhaps someone who'd been sort of immersed in the US market and the US market only, which is quite possible given the size and breadth, depth of that, of commercial activity in the United States, you can forge a fantastic career by and large there and there only.

22:29I've had a much more eclectic uh set of experiences as i think to many europeans you know by by definition and it's a big advantage was there ever an opportunity for that track and field career to become something more than one year uh no i mean i i uh you know i loved it and i did it all the way through high school and and university and then for about four or five years afterwards uh but i probably took it about as far as i could how you touched on this with your father as well but that crossover between business and sport how much do you think that can you can businesses and business leaders take from sport because it's the competitive edge but then yeah so it's a strategy i know one of your favorite sayings is the bigger the game the simpler the strategy i probably butchered that quote so my apologies but i think i think it was craig bellamy i think i could be misquoting him who coaches the melbourne storm rugby league team who said the bigger the game the simpler the game plan and i and i do think that's right because i think when you step up onto a on a broader stage you need to distill things down to what matters and you need to have a plan where larger and larger groups of people are going to be able to understand and implement so I think he's really onto something there I mean I'm I suppose the business and sport analogies are often overused the thing that's was helpful to me and I was a track and field athlete so I did the 110 meter hurdles and the 400 meter hurdles and you know there's I don't know how different athletes responded to this but I remember you know the first time sort of stepping up you know first race of the season or the first race in front of a significant crowd or the first race with world-class competition in any given season and just being terrified you know I mean you literally think I don't know what I'm going to do here okay and you know it's that sort of enormous pressure that predominantly you're putting on yourself where uh you know with with sort of in in a very limited time under all sorts of constraints, some real, some imagined, you've got to produce a performance, you know, and you've got to sort of think your way through it and, and equip yourself creditably.

24:29And so I think that's very important in a business setting, whether you're in sales, and you've got to step into a difficult customer interaction, whether you're in, you know, leading large number of sort of very different people, and you've got to sort of show up. And I think that sort of that that sense of occasion and the moment is really important. I think the constraint though with track and field is predominantly an individual sport, you know, as a many. But I think the benefit that people who play team sports, and I played some through high school, get is that you really do get softened by those around you one way or another.

25:05You know, in order to thrive in a team environment, you need to show some empathy. You've got to obviously produce and perform, but you've got to stick to a team plan you've got to show some empathy you've got to you know understand the sort of the ups and downs of of of team environments and i think that really helps in business too you've touched on this a little bit already with culture but how do you get the culture that you want to get into every part of this business because it's across so many countries and different types of work and and really diverse mixture of people i mean it's a great question i would say it's a work in progress so you know i think if anyone tells you we've got this great culture and it's sort of fully baked, I think they're probably ignoring the realities.

25:45You know, these are living organisms and they change every second of every day. And with different people coming and going, the changes can be positive or something else. If I think about the Thompson Royce experience. So, you know, when I came here five and a bit years ago, what was our culture like? I think it had sort of two very strong, perhaps three very strong parts to it. The first was a sort of a basis in intellectual capital. Thousands and thousands of highly trained lawyers, tax accounting audit professionals, journalists, you know, advanced degrees. And so there's always been a intellectual horsepower that's run through this company.

26:28Tens of thousands of very bright people come to work every day at TR. I think the second is this has always been a highly collegial place. And whether that comes from the sort of Canadian and Thompson family roots, or whether that comes from the sort of basis in the Midwest, which was sort of where our tax and accounting and our legal franchises emanated from, I don't know. But you come to TR and there are people who've worked here for decades, and they will be godparents to their colleagues, and they will have lifelong friends both in the firm or people who've left. So there's So there's sort of an element of friendliness and collegiality here that you don't often see.

27:07And I think the third is the trust principles. Now, as we enter this Gen AI environment, what we're trying to do is preserve and enhance those three aspects of integrity, of collegiality and of intellect, and add to that a number of other things. So we've sort of refreshed our values this year and we're in the process of sort of imbuing those throughout the organization, including a values day coming up. So those are customer obsession. So we really want to make sure that everybody has the customer sort of at the top of their minds in everything they do. The second is compete to win. You know, the collegiality can breed a little bit of a sort of a lean back environment in highly competitive environments.

27:53That obviously doesn't work. The third is act fast and learn fast, which really is that sort of process of iterative experimentation and innovation that's required in this environment. The fourth is challenge each other. So, again, the collegiality can mean that if you've got something, you know, less than positive to say to a colleague, you probably hold that back. and we need to get better at expressing those. And then the last is stronger together. You know, we do, when we come together, we tend to perform very, very well. And so we're in the process of making sure that we overlay those on those sort of original tenets.

28:26And I would say so far it's going pretty well, but to my earlier point, it is a constant work on. You know, I think just when you think your culture is sort of in a good place, you'll look under a rock somewhere and realise that you've got a problem. So this is sort of work that's never quite complete. What are some of the challenges you faced? Well, we are in 70 plus countries. And so, you know, you have to have a culture that sort of binds together 75 or probably many more than 75 different sort of cultures and countries and nationalities, languages and dialects. But at the same time, can be respectful of the different ways in which business is conducted and ways in which people work and communicate.

29:07And I think that's a challenge. A culture that sort of comes out of the Midwest of the US or comes out of the UK will have its limitations when it's applied to the Far East or when it's applied to Latin America. And so achieving that balance, I think, is always a difficult thing to do. The history of Thomson Reuters and the status of Reuters as one of the world's leading sources of news means being chief executive of this company is a high profile and unique job. Its ownership structure is also a bit different because the Thomson family still own roughly 70 % of Thomson Reuters. The remaining 30 % is listed on the stock market in North America.

29:50Look, I think it works well insofar as the Thomson family own about 70 % of Thomson Reuters. And they have always been a long-term, you know, and very stable owner. David Thomson, the chairman, has a very long-term view of the business. You know, his principal objective is to build a truly world-class company, and he's not interested in compromising in the short term to achieve that goal. And that's very helpful, you know, in terms of having that sort of long-term perspective. And in addition to that, we have 30 % public shareholders, including many of the large and leading financial institutions.

30:26And they provide, I think, a level of additional level of rigor and discipline. We meet with them regularly, probably eight or nine times a year. We're sort of spending a day or so with a variety of those institutions. And the questions they ask, the sort of implied direction that they provide, I personally find very helpful. So it's a good balance. I think there are many ways in which these things can be successfully constructed. But for us, this one works well. How has being in sort of a high-profile role, what chances does that bring as a CEO? Well, I think one of the benefits, for me at least, of Thomson Reuters is it's not a business brand name that's all that well known.

31:07You know, the Reuters brand is well known, particularly sort of outside of the United States globally. And a number of our products are well known. So Westlaw is well known. Practical Law and Co-Council are becoming well known. One Source and Ultra Tax, Go System Tax. These things are in various ways. I think, you know, certainly to the professions they serve very well. But the words Thomson Reuters tend to be perhaps less well known. And that can be a blessing sometimes. What's the biggest thing you've learned about leadership since you became a CEO? Oh, there have been many, many, many lessons.

31:42Some of them hard earned. I think one of the key sort of characteristics that I'm always working on is to do more listening than talking. You know, I think if you listen to people, you will learn a lot. And as a result, your decisions and your input into their decisions will be more thoughtful and more helpful. Who do you look to learn from? But I mean, it's going to sound trite, but everyone. You know, I enjoy catching up with friends who are in very, very different walks of life. You know, I have a friend who's a jaw. I have another friend who is an actor. I have a friend who manages one of the world's most famous photographers.

32:20and just listening to them and how they're thinking about their work and what they do and the changing dynamics in the various markets in which they compete, I find that not only sort of refreshing, but also helpful to get very, very different points of view. So within the sort of workday here at Thomson Reuters, I have an unwritten rule that I will, if any customer of any size and scale and any colleague, no matter where they are in the business, reach out and want to have a meeting, I will take that meeting or I will respond to their email or their text or whatever it might be. Because, you know, I think when you're in my position, in any position, I think you can learn something from every interaction.

33:02Is that part of why you've installed open offices to try and encourage collaboration? Yeah, it is part of it. I mean, I many, many years ago moved out of an office into sort of an open floor. And I found that for me, it just helped me be much more connected to the business. You know, if you sit sort of not far from the front doors, you can see salespeople come in, you know how things are going, because you see the expression on their face as to whether they've had good interactions with customers and they're seeing success or not. If you sit close to product and engineering people, you really get a sense for how fast we're moving from an innovation standpoint.

33:41When you sit next to the sort of functional heads, you get the pulse of how the business is performing and being governed. And so rather than have just an endless challenge of scheduling meetings, sitting in open plan, I think, gets you much better connected to the business. It's probably very irritating for those around me, but I certainly selfishly love it.

34:06you've been listening to the business leader podcast with me graham roddick our producer is anushka tate if you enjoyed this episode then please subscribe or follow the business podcast on apple podcasts spotify or wherever you get your podcasts to make sure you get updates when new episodes go live

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