Nancy McKinstry

Nancy McKinstry
CEO and Chair of the Executive Board

Wolters Kluwer

Nancy McKinstry has been Chief Executive Officer and Chair of the Executive Board since 2003. Prior to joining Wolters Kluwer, she held senior executive and management positions with CCH and Booz Allen. Nancy is a member of the Boards of Directors of Ericsson, Sanoma Oyi, Abbott Laboratories, and TiasNimbas Business School. She is also a member of the Advisory Council of the Amsterdam Institute of Finance, the Advisory Board for the University of Rhode Island, the Advisory Board of the Harrington School of Communication and Media, and the Board of Overseers of Columbia Business School. She was also recently appointed by the Chinese State Council Information Office as a member of the Foreign Consultant Committee, given her astute business leadership and long-standing expertise in the information and publishing industry.

Ms. McKinstry has been included in leading lists of business media as one of the most powerful women in business. Also in 2011, she was among Fortune's Global 50 Powerful Women in Business. She has also been included in Financial Times’ Top 50 Women in World Business, as well as on Forbes’ 100 Most Powerful Women ranking. She holds a MBA in Finance and Marketing and a BA in Economics. She also holds an honorary degree of Doctor of Laws by the University of Rhode Island in recognition of her contributions to business.

 

Watch interview highlights

 

A view from the top

In this short video, Nancy McKinstry shares her view on today's key business issues: risk, volatility, innovation, talent, and growth

 

Quotes

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

One of the most interesting things that actually occurred this year has been the penetration that we see among our customers in the use of Smart phones and tablets. We see that as a great opportunity for us. These new devices will allow us to bring our products very much into the workflow of our customers. So that’s actually having quite an interesting effect on our business and has nothing to do with some of the political or economic situations.

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

Job training and enrichment are absolutely critical because the kind of people we need in our workforce are highly educated people.

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

We operate in about 90 countries where we have substantial operations and then we distribute our products in about 150 countries. Our focus is very much that our local operations are run typically by local nationals.

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

We need to grow our own talent. It’s very difficult often to take people from outside to come into the company and have them be productive in a short period of time.

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

The pace of some of our investments has changed a bit. We’re investing more in mobility around things like the tablets and Smart phones. We’re investing more in emerging markets than we were previously

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

We’ve not been able to take one strategy that will work in India, that will work in China, that will work in Brazil. So you have to adapt the strategy very much to the local market. In China our focus has been on largely organic growth because we are a foreign entity. We can't actually own content assets so we have to have a lot of established partnerships: in China partnerships are really critical for us. In other places like India they are probably far less critical and there it’s about how to get distribution across the country. So each market is different and I think that the focus for us is how to tailor our strategy to meet the local needs of the business.

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

We’re building many more local products now in China than, say, ten years ago when it was pretty much focused on multinational companies trying to do business there.

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

China is a fantastic market but we’ve been there for 25 years so I think, although it’s starting to be very interesting, it still is a long term bet.

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

There is much more need for scenario planning than there was a few years ago. Much more need for dashboards that senior executives can look at and understand risk.

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

Since the financial crisis of 2009 we have a budget as we always have but then we have a plan b and sometimes a plan c and even a plan d occasionally, depending on how volatile we think the situation is.

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

Products are not static any longer and that’s partially because they’re now digital; so even when we produce a book that’s in digital form, the opportunity to keep enhancing that, both adding new content, adding new kinds of features, is much more apparent today than again many years ago and so the process of innovation has changed.

Nancy McKinstry

Nancy McKinstry

CEO and Chair of the Executive Board, Wolters Kluwer

It’s less about how can you move from Holland into Italy but more about can you collaborate with your peers around the globe.

 

Read interview transcript

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How do global changes in the economy affect Wolters Kluwer growth?

Yes I think clearly in 2011 things are unfolding pretty much as we expected.  Part of what’s unique about Wolters Kluwer is that more than 70% of our business is subscription oriented; therefore we’re fairly resilient in terms of the short term volatility that we are seeing. As we look out over the medium term the kinds of things that affect our business more than, say, the short-term economic volatility are things around how much regulation there is, how our professionals are using technology in their work to drive productivity and then how do we see the global trends really occurring among the customers that we serve.

As you mention medium term, short term, do you feel a sort of delayed effect of the changes in the global economy?

Yes, we tend to be fairly resilient to short-term fluctuations but clearly all CEOs would say that the outlook for growth is less than it would have been six months ago.  Our expectations are that Asia will continue to grow well.  The US will continue to recover.  I think Europe will be more challenging but overall we would expect that 2012 will bring stronger growth for Wolters Kluwer than we saw in 2011, which itself was stronger than 2010.

What issues really affected your firm in over the past year?

One of the most exciting things is the technological change.  We’ve been transforming from a very traditional publisher into a provider of information and, increasingly, software; more than 72% of our business now comes from online software services.  One of the most interesting things that actually occurred this year has been the penetration that we see among our customers in the use of Smart phones and tablets.  We see that as a great opportunity for us.  These new devices will allow us to bring our products very much into the workflow of our customers.  So that’s actually having quite an interesting effect on our business and has nothing to do with some of the political or economic situations.

Do technological innovations influence your products and the way they are bought by the customers?

Right, because our customers more and more want to ‘work anywhere, anytime’.  Today about two thirds of all nurses and physicians, particularly in North America, are using Smart phones in their daily work; so that gives us opportunities to think differently about how we push our information into the hands of those kinds of customers.

What in your opinion should the government do to support the resilience of your company?

Governments have to focus on growth and job creation.  Until we get into a situation where the GDP growth levels are healthy and unemployment levels come down, it will be difficult for all businesses. Then, certainly for us in particular, governments need to focus on education.  Job training and enrichment are absolutely critical because the kinds of people we need in our workforce are highly educated people.  So the extent to which governments focus on fostering education and innovation is very positive for us.

And that applies to all the countries that we operate in.  We started as a business that was very locally oriented, meaning local languages, laws and regulations; now we operate in about 90 countries where we have substantial operations and then we distribute our products in about 150 countries. Our focus is very much that our local operations are run typically by local nationals, who understand the markets, speak the language etc.   So in each of the countries we operate in it’s absolutely critical that you have political stability, that you have economic growth and that again you have a focus around education.

Is it anything you can influence or is it something you talk about or have you a stake at this level of the governments?

We tend not to do a lot of lobbying specifically but we foster within the organisation a lot of emphasis around innovation and talent management. We very much believe that we need to grow our own talent.  It’s very difficult often to take people from outside to come into the company and have them be productive in a short period of time.  Our best opportunity to grow the next generation of leaders is working with members of our community, so we do a lot of work in terms of training, education, talent development as a way to continue to develop the staff inside the company.

Is there a connection also with education through universities or schools?

Again in a very loose way.  We typically recruit from some of the best universities in the world and our focus once we bring people in is to really try to grow them within the company.

Has your strategy changed over the past year?

No, no, our strategy remains very focused on growing the business.  We do that in three ways: one is the continued investment in building online and software products – that’s really the way that we’re growing as a company; second is around globalisation particularly as we move more to develop software products – we have this great opportunity to develop our products once and then distribute them across multiple geographies; and then the third thing is to really look at leveraging things like mobility to drive growth in the business.  So the strategy has pretty much remained stable.  I think the pace of some of our investments has changed a bit.  We’re investing more in mobility around things like the tablets and Smart phones. We’re investing more in emerging markets than we were previously so some of the capital choices have changed a bit but the fundamental strategy pretty much remains the same.

You mentioned that you were represented already in 90 countries; what part of this refers to the emerging markets and in what way is it growing?

For us it’s still a relatively small percentage of our total revenues.  The fast growing economies plus central and eastern Europe, which are important markets for us, represent about seven percent of our revenues: so still pretty small but growing very fast.

For example, we’ve actually been in China since 1985 as one of the major leaders there in tax and legal information. Our growth rate over the last couple of years has been upwards of 20% in those areas, partly because these markets are really beginning to develop, due to a rise in the number of professionals – doctors, lawyers, nurses – and the establishment of global frameworks in law, in medicine, in tax, accounting. 

What do you do to land in the emerging economies?

Each one is different so we’ve not been able to take one strategy that will work in India that will work in China that will work in Brazil.  So you have to adapt the strategy very much to the local market.  In China our focus has been on largely organic growth because we are a foreign entity. We can't actually own content assets so we have to have a lot of established partnerships: in China partnerships are really critical for us.  In other places like India they are probably far less critical and there it’s about how to get distribution across the country.   So each market is different and I think that the focus for us is how to tailor our strategy to meet the local needs of the business.

China is an interesting example.  I mean India has of course a law system that is familiar in a way.  China is completely different and so you have to relate in a different way also to the content of your products I imagine.

Right. We publish in English and also in Mandarin and we find that the kinds of products we need to build are completely different for the customer base which works in a bilingual environment, versus the customer base that’s very local.  So we’re building many more local products now in China than, say, ten years ago when it was pretty much focused on multinational companies trying to do business there.
 

You seem very confident.

China is a fantastic market but we’ve been there for 25 years so I think, although it’s starting to be very interesting, it still is a long term bet.  If you look at China right now the total legal and tax information market is only about 150 million euros – so smaller than the Benelux as a market but growing very fast. 

On managing enterprise level risk: is it changing in a way because things seem stable at Wolters Kluwer also in this respect?

Enterprise risk is quite interesting for us because we build products to help our customers with that, but it’s also something that we have to manage ourselves as a public company. What’s changed about it is that the level of complexity keeps growing.  Our customers want one solution:  they want to be able to take one set of products and use them to manage risk across the enterprise.  And more and more CEOs like myself want dashboards so we can look at one kind of framework.

Absolutely.  So there is much more need for scenario planning than there was a few years ago.  Much more need for dashboards that senior executives can look at and understand risk.  So that’s changed how we approach it as Wolters Kluwer but also it’s changed some of the products that we’re delivering.

When you talk about scenario and scenario planning can you give us an example of how that works?

Since the financial crisis of 2009 we have a budget as we always have but then we have a plan b and sometimes a plan c and even a plan d occasionally, depending on how volatile we think the situation is. And I would say that most companies are doing something similar.

In what way is the whole sustainability issue important for you?

It’s certainly been on the agenda for the last decade and our focus has been to try and link our sustainability efforts to our business. If it’s just a check the box exercise it’s not very useful for the company or the community.   We have focused very much on healthcare as one of the ways that we’re sustainable as a company.  We work with governments in Africa and other communities to try and distribute some of the information that we produce in the healthcare arena.  And then the second major focus is to really drive the business digitally.  Now that’s been part of our transformation anyway but clearly it reduces paper and that has positive effects on deforestation and other aspects of sustainability. 

But this digitisation is at the same time a sort of risk for your own business because people tend to think that anything that goes digitally is for free in a way or at least cheaper than when you buy a paper book. 

Luckily for us we’ve been on this journey now for many years and today more than 70% of our business is online software services.  So we have used the digitisation as a major platform for growth.  Our online and software products are growing while our print products are shrinking.   So for us the customer base has recognised the value they get in digital products and therefore they’re willing to spend money.
 

You talk about technology there is also an innovative aspect of course.  Is your approach to innovation changing?

Yes, absolutely.  One of the things that’s really fundamentally changed about the business is that to build the kind of products our customers want, you need editors who are subject matter experts. You also need technologists and marketers and then you need this team to build the products; 20 years ago it was much more individuals who built products.  So innovation has had to change because it’s really a team effort and not a single effort.   The other thing is that innovation is a constantly moving target.   Products are not static any longer and that’s partially because they’re now digital; so even when we produce a book that’s in digital form, the opportunity to keep enhancing that, both adding new content, adding new kinds of features, is much more apparent today than again many years ago and so the process of innovation has changed.  The products and the way we embed innovation is changing and then how we measure innovation is changing.

But also the speed of work and thinking has to change among your staff because it requires very talented people to work in such a fast way.

And it requires very creative people because you have to take these new technology developments and rethink the product: a book in printed form should absolutely be different when it’s on a tablet. It’s not the same experience.  And so we have to have the ability to really conceptualise that and work with our customers on how they want these products to work.
 

What you described just now requires a sort of a shift in your work force and not only in how people are working but also what kind of people are working and working together.  How is that going?

Our most fundamental shift was moving from a traditional publishing company to being much more of a technology based information provider.

And very dynamic. We’ve had to add a significantly different level of capabilities.  First and foremost we had to add technologists.  Today we have more software engineers working for Wolters Kluwer than we have editors.  And then we had to add a much stronger focus on customers.  Therefore we have a lot more marketing people, a lot more sales people than we would have had many years ago and again it’s this ability to collaborate that is now critical. That’s going to drive our success.  So in the early part of 2010 we changed our organisation and we moved to global lines of business because we found that there was a limit to how much our teams could collaborate across borders.  That’s been actually quite impressive. As a company we’ve been able to really build global products and, up until 2010, we had only a few examples of that; now we have many, many examples where we’re building products once and then distributing them in many countries in many different languages.

You mentioned 90 countries so I imagine 90 countries where there are teams working together and that these teams also have to work across countries together.

Yes.  A great example is KLEOS, a major practice management tool for lawyers, which helps them file their documents and bill for time.  We are building it out of Italy and Spain but it’s marketed in Belgium, Sweden, the Netherlands, France and we see it as a cross border product.  It speaks to both the transformation of Wolters Kluwer into a software builder and this ability to collaborate across the globe to build product.

So when you talk about talent how would you describe talent related to your company?

The most important talent we have is still the domain expertise – the people who really understand medicine, law, tax accounting, financial services; they bring that expertise to the company and into our products.  hat customers value is that our products help them actually navigate their daily work.  To build that kind of critical talent takes years and is really essential to the long term health of the business. We spend a lot of time trying to identify those people, bring them into Wolters Kluwer and then develop them into the next generation of leaders. 
 

Is it getting harder to find that kind of talent?

Yes absolutely. What is still remarkable is if you asked an accounting firm or a hospital today what is one of the big problems, it’s finding talent.  And if you actually look over the medium term what you see is there's going to be a shortage of professionals.  These are our customers.  And there’s also a shortage of high quality talent around the globe;  if you talk to most of our customers they will say I have to do more with less people so the only way they can really accomplish that is through productivity improvement.  So a lot of the products we build help our customers do that.  Internally, one of our big focuses has got to be on attracting and developing talent. And so it’s really been a commitment that we’ve made in the last five, six years to develop the high potentials within the company.

So this educational part of your company that’s where it comes in.

Yes. One of the great things about being a global business is when you talk to some of the newer and younger parts of our workforce you know what they want.  They want to be part of a good community.  They want stimulating work and they want to be connected to a global business and so those are the kinds of things that we’re fostering within the company because that’s what this next generation really has identified as the key things they're looking for.

Does that also mean that you move personnel cross border to fill gaps where they are perhaps occurring, like Dutch people to Italy?

Yes we still do that although again we try and have local nationals that run our businesses. We still have some level of ex-pat community but more and more we’re building virtual teams.  So we have many communities that we've built within Wolters Kluwer that are cross borders.  One thing we’re focused on, for example, is how to bring our book product lines into the e-book programmes of Kindle, the tablets and all of that.  About two years ago we brought together people around the globe that work on books to work together as a community.  So once a year we have a big forum where they all come together and we showcase what’s going on with technology, some of the more innovative products that we’re developing.  And they take back that learning into their local market place.  And they get together once a month, virtually, so we use technology as a way for them to communicate and share best practices etc.  That’s been a very successful model.  So it’s less about how can you move from Holland into Italy but more about can you collaborate with your peers around the globe.

What do you do to make your own firm attractive to the millennium generation?

I think that is a challenge because we’re really looking for employees to make a long term commitment because that’s how they develop the skills that we need to be successful.  So we try to create a very compelling work environment; what we actually do is very interesting and socially responsible.  We’re helping doctors do better in healthcare.  We’re helping accountants and lawyers do work in a better way.  So I think that our fundamental mission as a company is very compelling to the millennium generation.  The first thing we try to do is get that message out.  Then the second thing is to provide them with an intellectually stimulating workplace and this notion of collaboration with technology people, marketing people, subject matter experts. Doing that on a global scale is quite exciting for a young person.  So what I hear from that generation is very much the single most important reason they come and they stay is this kind of stimulation that they get from an intellectual perspective and that develops their skills.

How has your marketing to talent changed over the past years?

Part of what’s changed is again because when you work for a local business, it’s local nationals that are running that business. We’ve had to draw a connection between the local operations and the Wolters Kluwer name. Ten or 15 years ago a new employee might not even know that name.  Now we spend a lot of time focusing on building the brand and connecting that very much to the local operations. 

In a way the growth and development of your own company reflects the needs of the youngest people so it should be a perfect match.

We try very hard to make it a perfect match.

And when you consider your own role as CEO and the focus of your own work could you say that this has changed also?

Very much so.  I spend a lot of time out in the markets so I would say that if you look back 15 years and see how has it changed, I spend much more time with customers. 

All over the world?

All over the world.  I spend much more time building the global business so we’ve had to take a much more concentrated approach, a centralised approach to how we’re going to run the business globally. So this notion of working together across the globe is absolutely critical; I spend a lot of time with customers and employees around the world, and also thinking about how we allocate our capital around the various operations that we serve.  That’s a big part of my job: to say OK where do we want to focus the business for growth; where do we want to maintain a position and where do we want to even accelerate that investment level.

And when you sometimes lie awake at night what is it that keeps you awake about the company?

I think today we’re in a very good position.  We spend a lot of time, as I say, making portfolio decisions, a lot of time investing for online and software products, so I feel quite good about the medium term.  I think the thing that is most difficult right now is really understanding where the economic cycle will land in the next 24 months.  So this notion of scenario planning becomes quite important for us as a company.