Dec
10
Political Potpourri
Filed Under Blog, data protection, Education, healthcare, Industry Analysis, internet, Pearson, privacy, Publishing, STM, Uncategorized | Leave a Comment
When I want to write about innovation a political agenda looms. When I write about what the politicians are doing to the information industry I find it is so deeply unsatisfying and depressing that I am forced back onto descriptions of industry self-survivalism! But at times there is no choice: politics is a burden we all have to bear, and we in the UK bear a particularly heavy burden at the moment. Unless you have been sheltering in an igloo in Lapland awaiting Father Christmas, you cannot have failed to hear something of Britain’s latest Euro Row, which hit gale force this week with the ferocity of the storms that hit Scotland and generated 165 mph winds and set wind turbines alight. The political equivalent of this was a British Prime Minister using his veto in a European Summit and ending up in a minority of four, which is likely to diminish to one.
Why is this in the least interest of the information industry? While Mr Cameron acted in order to prevent his coalition from breaking down and splits developing in his own party, his ostensible reason was to prevent the European Union passing laws disadvantageous to the city of London. Financial services are 10% of UK GDP. They must be protected as the key to success in Europe. Yet, as Lionel Barber, Editor of the Financial Times, notes in his editorial this morning, there is nothing to prevent the 26members of the Union who will now get together in tighter conclave on budget, tax and trading matters to pass laws which discriminate against City interests, as long as those laws do not infringe the current regulation of the greater community of which the UK is still a member. The Prime Minister is claiming victory: he should take care. Every British victory in Europe since 1815 has been followed by Britain losing the peace.
And have a care too in more domestic matters. The junior Business minister, David “Two Brains” Willetts, supported a leadership speech on the importance of the British role in Big Pharma by undertaking to secure, despite lively public protests, the release of anonymized datasets covering diagnostic and prescription practice in the NHS, still the world’s largest health service. Yet he appears to forget that it is impossible to do this unilaterally. Not only are the major pharma players global titans, but providing UK-based players like GSK with information denied to their German or French rivals would be a state aid, or at least a restraint of trade, condemning UK government to the dock in the courtrooms of that very alliance whose powers they have recently been diminishing. And do these data and their availability do anything to promote employment in research labs in the UK? Nothing at all: we are missing the point about a networked economy if we think otherwise.
Elsewhere in the deeply paranoid British civil service, we continued last week in the hugely entertaining game of finding the pea under the information walnut shells. Having declared a Public Data Corporation to trade government-created content with the private sector, public consultations have led to real divisions about what this superstructure is meant to achieve. Local government and SOCITM, the public sector IT professionals, clearly read the intent rather than the effect of the proposals; This is an effort to frustrate the privatization of the UK Land Registry, Ordnance Survey and Met Office by regulatory obfuscation – and it is working splendidly well. Meanwhile, a near meaningless consultation on MiData – a government plan for re-regulating identity protection – has created a panel of private sector players, including Google and the real villains (energy utilities, high street banks) to give consumers more assurance that their identity information is not being grossly misused. The government’s seriousness on this topic is underlined by the size of their budget of £10m ($15m)!
Finally, the week ended with the revelation that school examination boards regularly brief teachers, in seminars paid for by schools, on what the upcoming examination is likely to cover. This is apparently scandalous, as if the huge National Curriculum requirement could ever be fully examined without giving hundreds of question options in the exam papers. What is the purpose of the examination if it is not to test what has been taught? As a result, several examiners have been suspended for cheating, several inquiries have been set in train, and the interesting idea flated that all the examination boards should be combined, and then privatized (since they would then be easier to regulate, fine, and would face regular contract renewal. Pearson already own one board. And ETS formerly held the SATS marking contract but lost it after an equally unilluminating controversy about performance. Change in outcomes then may not be a direct result of the causes of concern.
Apart from which little happened in information market politics last week. Back to innovation next week, with a sigh of relief.
Dec
3
Accelerated Departures Confront Reality Shock
Filed Under B2B, Blog, Financial services, healthcare, internet, news media, Publishing, Reed Elsevier, Thomson, Workflow | 1 Comment
You can tell when even major corporates are embarrassed. Their use of language deteriorates to the point when meaning (hopefully) vanishes and we hacks are left to put our own, corporately deniable, slant on their gnomic pronouncements. Thus it is with the “accelerated departure” of Tom Glocer, CEO of Thomson Reuters. What exactly does that mean? Did he leave before his time, or was he unexpectedly ejected? The rumour mill had it that he was going in April 2012, so was the acceleration to be found there (his fourth anniversary is not a huge senior service for such a stable outfit as Thomson Reuters), or in his contract, or elsewhere? And did he know, or was he pushed?
Certainly it is always alleged that his predecessor, Dick Harrington, did not know that a discreet negotiation continued behind the scenes bringing Thomson and Reuters together with no place in it for him. That, if true, must have been a surprise. Did Tom Glocer come by a similar “confronts reality” shock, as the FT termed it? And what was the reality that was being confronted? I can think of at least three realities that must needs be in the minds of Thomson Reuters CEOs, and none of them relate to the decline in market value which is widely blamed for triggering these changes. The first, and most important, is the nature of the company’s ownership. Wherever a big player is really 55% controlled by the family of its original founders, confidence issues will come into play. This is real control, not the artificial dominance of voting shares practised by Murdochs or Harmsworths in defiance of market views of good practice. And this real control means that, as in the eighteenth century, once the incumbent first minister loses the confidence of the King and his closest advisor, it is impossible to continue in office. That rule applied to the reign of Ken Thomson and John Tory, as it does in the Woodbridge Trust of David Thomson and Geoffrey Beattie. It is simple and natural; you go when the owners no longer believe you can deliver.
And since Thomson Reuters are the largest professional player in the marketplace, it is worth asking what these men need to have confidence about. As far as the press commentary is concerned, one would think that the only issue is the Eikon terminal and its slow start. Well, the history of Reuters is littered with slow starts, one of which let Bloomberg into the marketplace to begin with, and several of which cumulated to create this peculiar position where the smartest and most modern application is also the cheapest and has lost market share in the recession to Bloomberg’s older and more expensive option. In each of these cycles the market for trading systems has returned to rough parity. Over at the professional side of Thomson they know about these cycles, having sometimes been up and sometimes down, but in that market they are currently in the Bloomberg position and Lexis are in the Reuters position. So did Tom Glocer’s acceleration towards the swing doors relate to all this?
Certainly this may have been the symptom, but perhaps it was not the underlying problem. The mandate that Tom Glocer accepted was to build an integrated company and it is possible, as the company became wracked by the issue of combining the parts to create new growth as a whole, that the Woodbridge owners began to doubt whether this aim was ever going to be achieved through these policies. Certainly the sacrificial slaughter of a layer of Reuters management and the balkanization of the company into an unmanageable number of operating units did not lull any misgivings in Toronto, though they may have given rise to rejoicing in old Thomson management circles, where the attitudes of their new Reuters colleagues had been met with all of the enthusiasm that the Anglo-Saxons showed to their new Norman rulers. In the new dispensation we are back down to five divisions, with former Reuters strategy chief (latterly running GRC) David Craig taking the old Market divisions, Legal going to Mike Suchsland, Tax and Accounting to Brian Peccarelli, and Global Growth to Shanker Ramamurthy. Jon Robson gets the Business Development role. What factor is common to all of these? None of them comes from a very long term Reuters and/or Thomson background. A generation has effectively passed.
And what of Jim Smith, the new CEO. Some commentators have him as a caretaker, awaiting the new strategic leader to be found and installed. Others, and I incline to this view, see him as chairman and arbiter of resource and manpower development and deployment to support and drive the integration of these two companies. So not a traditional Thomson CEO, any more than Erik Enstrom is a traditional Reed Elsevier CEO. In the latter case one has a feeling of a profoundly numerate portfolio owner looking to encourage the growth points with acquisition investment, dispose of underperformers and reward successful managers who reliably produce results. It is almost as if Reed Elsevier does not see a need anymore for an informing central strategy about its market positioning, other that “we will invest in anything that works and avoid the bits that don’t”. By contrast, Thomson Reuters is built around a distinctive market positioning, a “big niche” strategy and definite ideas about what it needed to buy, sell or grow to make the aspiration work. And yet… once you have the strategy in place, here too market strategic thinking devolves to the operating unit quite quickly. Hopefully that means that in both of these market leading players, the doors will soon stop revolving at the speed of light and we can get back the real problems of addressing the needs of global information markets in times of scarcity.
PS. One of the items on Jim Smith’s agenda must surely be the finalization of the sale of Healthcare, whose projected disposal was an early agenda item for his predecessor. It is hard to remember but this move has now been projected for almost four years!
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