By now you may have heard that Thomson Reuters CEO, Tom Glocer will step down at the end of the year and the current COO, James Smith, will take over at TRI. In a year of turmoil for TRI, plus watching its stock value drop over 36 percent this year (see chart), it wasn’t surprising to see this move coming. In a way, the whole TRI situation seems to look a lot like another industry that had three major players, all of whom did extremely well during the good times, and all of whom thought that they were pretty much invincible in the marketplace because people knew their brand, were loyal to that brand, and would buy them year after year without question.
In my opinion, Thomson Reuters made a major mistake under Glocer’s time as CEO. They went Big… very big. As much as we in the legal area of their wing would love to point out the problems that TRI ran into with their WestlawNext platform release and “modest premium” selling pitch, it was really the Eikon fiasco on the financial side of the TRI empire that has stung the most, and has caused the Thomson family to sit up and take notice of what was happening to their company, and their wealth. Although Eikon and WestlawNext are two different products, they suffer from the same error in judgement. Somehow, TRI thought that what its customers needed was more “SUV” type products. Big, expensive databases that packed as many luxuries as possible, and each of those luxuries came with a premium price tag. Now that we are nearly two years into the process for both Eikon and WestlawNext, sales are sluggish, stock prices are down, and customers are not happy. That is not a good combination for a CEO, and Glocer took the fall for the bad planning.
Customers aren’t locked into the TRI products, and what’s worse, they are quite happy to go to a faster, lighter, cheaper model of resources such as Morningstar, or even use low-cost or free products like Fidelity Investments or the SEC website instead of the TRI alternatives which are massive and expensive. It’s just not the 1990’s and early 2000’s anymore… we’re in a time when customers have choices, and are quite willing to move to different platforms that will work almost as well, at a much greater savings to their own bottom line.
One of the funny things that I’ve seen throughout this year is the nostalgia of what the old Thomson Publishing company used to be. Usually, it comes from those of us in the library field that remember when we had a good relationship with our local vendor representative, and that relationship was built on understanding each other’s needs and building a trust between each other. Now I’m seeing the nostalgia coming out of the Thomson family and what their company used to mean to them before they went public and turned it over to those who only care about the next quarterly statement and how to impress the stockholders. TRI somewhere along the line lost its way and forgot what it was that made it a good company. Now it just looks like any other company out there pushing to improve its stock price by cutting staff, increasing prices on services, and all the other tricks that make stockholders happy, and at the same time, make their customers start looking at other places to take their business.
The Old Thomson is dead. It will never be back. The new TRI isn’t necessarily dying, but I’d say that it is very sick and needs to take another look at how it is going to go forward from this point. I’m hoping that James Smith has been given direction from the Thomson family to take a look back at what the customers are needing, rather than what Wall Street, or the Toronto Stock Exchange is needing. If they don’t, there won’t be an Occupy TRI movement to worry about, there will be a flee TRI movement.