Thomson Reuters is a truly global corporation. Present in over 100 countries, it employs some 45,000 people worldwide. Included among them are innovation specialists, technologists and data scientists. The organization even has innovation labs in several cities and a Technology Center in Toronto. CEO Jim Smith has said he believes the center will become “one of Canada’s largest technology hubs.”
But even with such resources at its disposal, Thomson Reuters – like all companies in the information services sphere – has of late found its work disrupted. That includes its legal content and research business, the second-biggest area of revenue generation for the organization after financial and risk solutions.
In its latest annual report, Thomson Reuters describes its legal practice as facing pressure “from new competitors leveraging advanced technologies such as artificial intelligence and cloud software,” and says it is “impacted by the digital disruption that is affecting all content and knowledge-based industries.”
Learning to listen
Responding to these challenges, Thomson Reuters has committed to investing in areas like AI and blockchain. It states in its annual report that it wants to create “an end to end digital experience for its customers.”
Figuring out how that should be done was exactly the mission the company set for a cohort of top managers sent to Silicon Valley on an SVIC executive immersion program.
As the executives admitted, for some two decades Thomson Reuters has been selling essentially the same software through a licensing model. The company had always taken the approach that its customers in industries like finance, tax and law were conservative and therefore not interested in change.
But today, with every industry going digital, Thomson Reuters does not want to get left behind. That’s why its executives were especially interested in understanding how tech firms develop new products.
They found the answer to that question during visits to Facebook and Google on the first day of their tour. With both organizations subscribing to an agile, “lean startup” philosophy, the Thomson Reuters team were able to see how innovation happens in Silicon Valley. According to lean principles, ideas become reality through a quick-fire process of prototyping, customer feedback and iteration.
Having seen the success such an approach can breed at big tech firms, the Thomson Reuters executives then asked themselves how it might apply to their own business. At a design thinking workshop on day two of their program, they reflected on their own corporate culture.
This led to a realization: instead of listening to customers, Thomson Reuters would usually take decisions based on its own assumptions about what they want. As a result, the company had been producing the same product for two decades and was playing catch-up to customer demands for things like cloud computing and software-as-a-service.
The workshop was an experience both revelatory and painful. As SVIC program manager Marina Wolters recalled, the Thomson Reuters team described it as “hell” but said it was also “the best conversations we’ve had in three years.”
Learning from others
If day two was the bitter pill, day three was the spoonful of sugar. Thomson Reuters visited Western Union, where they learned about the money transfer company’s five-year process of digital transformation.
This gave the Thomson Reuters team cause for optimism. They saw how Western Union had gone from not having a tech strategy to the point where they now use AI and big data to listen to their customers, not their executives. Mistakes had been made along the way, but the company has learned to innovate by starting small and failing fast. “We did it,” the Western Union representative told the Thomson Reuters executives, “and you can too.”
In fact, Thomson Reuters already has some of the raw materials to make the digital switch, including an enviable amount of data on their clients. The managers who came to Silicon Valley knew they should leverage this information to create new products, but they didn’t know how.
In this they are far from alone. As Mone Veron, the CTO at Thomson Reuters own innovation labs has said, “What we’re seeing is organizations paying attention to how to think about their data strategy: what data do I have in-house, how do I store it, which data set do I need to bring in? Because that data feeds into the algorithms. Data is now a strategic asset. It’s something that’s valuable.”
Changing for good
Three days of company meetings, workshops and strategy sessions had shown the Thomson Reuters executives how innovation happens and how it can work for a global business such as theirs. After hearing from big enterprises which have successfully navigated the tumultuous process of digital transformation they also had the blueprints – and the optimism – to make their own switch.
As their third and final day drew to a close, the Thomson Reuters team knew they would need to come up with a digital strategy unique to their organization. Having learned while in Silicon Valley where their approach to innovation had misfired, they left knowing exactly how to get it back on track.