Speaker 1:
From the library of the New York stock exchange at the corner of Wall and Broad Streets in New York city, you're inside the ICE House, our podcast from intercontinental exchange on markets, leadership and vision and global business. The dream drivers that have made the NYSE and indispensable institution of global growth for over 225 years. Each week, we feature stories of those who hatch plans, create jobs and harness the engine of capitalism. Right here, right now at the NYSE and at ICE's exchanges and clearing houses around the world. And now welcome, inside the ICE house. Here's your host, Josh King of Intercontinental Exchange.
Josh King:
We are recording this episode in the days leading up to Christmas 2020. With the deployment of the COVID-19 vaccines beginning, there is reason for some holiday cheer. The global scientific community developed several vaccines in less than a year, a herculean effort that seems like a miracle. The medical breakthroughs were made possible, not just by the researchers working today, but every single vaccine innovation since Edward Jenner's smallpox vaccine back in 1796. Technology has allowed the medical community to reach across both space and time, define the data and insights needed to develop treatments, test vaccines and scale production in a way that fulfills the long promised potential of bringing together digitization, big data, artificial intelligence, and human ingenuity.
Josh King:
As we'll hear from our guest today, Clarivate's Jerre Stead, the idea of centralizing research ideas and innovations is a long established tradition in the scientific engineering and medical communities. It's also ripe for disruption, Clarivate own history stretches back to publishing of a register of scientific names in 1864. Today, that database, the zoological record is now online and part of the company's web of science. Our conversation with Jerre Stead, executive chairman and CEO of Clarivate, on creating the tools that drive innovation, transforming the business of data and the lessons in leading people that he's picked up along his career heading, listen to this, 11 public companies. That all comes up right after this.
Speaker 3:
Navigating dynamic markets requires a relentless pursuit of knowledge. Now join market experts to learn with ICE Education Live. Attend live video training with practical lessons across global asset classes. On demand modules provide base knowledge. Participants can then attend live training sessions, including group review and test for certification. We also tailor training for your needs and in-house projects, ICE Education Live courses, continue your education today.
Josh King:
Our guest today, Jerre Stead is executive chairman and CEO of Clarivate PLC. That's NYSE ticker symbol, CCC. Jerre served as the CEO of Churchill Capital Corp until its merger with Clarivate in May, 2019. Clarivate is the 11th public company in which he's served as CEO and or chairman. Prior to leading Clarivate, he served as chairman and CEO of IHS Market, and previously served as executive chairman and CEO of IHS. He also previously led Honeywell Phillips' medical electronics square D, AT&T global business communication systems, NCR Corporation, NCR Japan, Legion Corporation, and Ingram Micro. Jerre, what a resume. Welcome inside the ICE House.
Jerre Stead:
Thanks Josh. Good to be there.
Josh King:
So in August, Jerre, Clarivate announced the launch of its coronavirus virology and infectious disease. We call it CVID data lake to support global researchers and policy makers in their efforts to make data driven decisions that accelerate disease response, prevent and prepare for future pandemics. How did the CVID data lake bring together the different services already offered by Clarivate to help search for a cure?
Jerre Stead:
Great question, Josh. Simple way to say it is we took all the massive data we had, put it on a common platform. So when we call the data lake, that's, as you know, the current nomenclature, but it's really up in the cloud, and it takes all the massive data all the way back over 50 years, brings it all together and lets us get in and use it any way we want any time. This one was really neat because we gave most of it to the researchers that were doing the work on what was now released with the vaccines. So it was a big win win for us. Clearly, there's far more than what was needed for the vaccine in the data lake, but that's today the most powerful and actually largest that exists any place.
Josh King:
I want to geek out a little bit and go a little deeper into this data lake. The world has been focused on how the COVID vaccine has been developed, but Clarivate's services have been providing the data that scientists and other innovators need to succeed for generations. You mentioned 60 years. In fact, when you visited the NYSE to announce the combination of Clarivate with Churchill Capital, you had the Garfield family ring the bell in honor of a Doctor Eugene Garfield, the original founder of the Institute for Scientific Information in 1960, which was the forerunner of Clarivate's web of science group. How did that product develop from the early sixties and become part of the Clarivate family?
Jerre Stead:
Let me just add a bit of color when we did that bell ringing. His sister who was 92 rang bell with us. I gave her because I got a lot of the other gavels. I gave it to her, Josh. She took it home and had breakfast with her friends each morning and did bell ringing watching the open of the New York Stock Exchange for two weeks. So, that's as good as it gets. So pretty cool. So it's actually a great question. Her brother, a university professor, almost 60 years ago. As he did that, he was collecting it manually and it was being brought in and typed in literally into a data system that then had to be looked at each and every day and updated.
Jerre Stead:
What it did then and, of course, what we do today is miles ahead. But that's a collection that today is looked at as the place if you're a journalist or if you're a researcher, or if you're a publisher, as the place you want to be, because we're the only independent partner that looks at all of those, takes the very best, recommends them. The awards we give out each year to the best researchers in the world are coveted and what we're able to do today, of course, to massage, manipulate that data versus what Garfield did is an amazing shift. It's actually a great example of what is going on with our technology in the world we're in today. We can do more quicker today than I am sure he ever dreamed or imagined.
Josh King:
How is technology changing those offerings that you have both in how the data can be used and how it's affected the business model?
Jerre Stead:
Yeah. So just as an example, when we brought the companies together, and as you mentioned May of 19, we had just started a program we called Singularity, where we were automating with artificial intelligence machine learning, all of the manual work that had been done for all those years of all the massive data we had and turning it into information. Which today now ... in fact, just before I got on with you, I was doing my weekly update with the guy that leads Singularity. We just completed phase one today, which now puts us at the very peak of the ability to provide any customer anything he or she wants on almost any research document you can think of, like that. That's versus just think ... like I said, you go back 60 years ago and it would be call in, ask for and receive eventually.
Josh King:
Yeah. In paper form brought by the Post.
Jerre Stead:
Literally.
Josh King:
Along those lines, Clarivate publishes a highly cited researcher list that identifies researchers who have significant influence in their chosen field of study. Dr. Gerald Chun has appeared on the list for three consecutive years for his contributions to understanding the brain and its diseases. This includes Alzheimer's, which is a disease that your mom suffered from, and that you've devoted a significant amount of your personal philanthropy to. I believe some of the COVID vaccines have used research that originally began with Alzheimer's treatments. Do you think medical progress has been bringing us any closer to a cure in that area?
Jerre Stead:
I started the Alzheimer's Research Institute in Phoenix 15 years ago. It's the banner Alzheimer's Institute. All of our efforts have been on prevention, not on cure. Dr. Eric Reiman is the head of it. Probably the most ... not probably, in fact is the most acknowledged expert in the world today. One of the things that's been so interesting, I talked with him two, three times a month. Five years ago, there was a group of native Indians in Columbia, a group of about 25,000 of them that all got Alzheimer's between the age of 45 and 50. 100%. That's where the first testing went on with vaccines, a placebo group, and two vaccines.
Jerre Stead:
The one vaccine eventually had to be stopped because of side effects. After five years, and it's all public. There's been articles in the Times and many other newspapers and magazines. After five years, 80 some percent of the placebo group had Alzheimer's, less than 1% of that particular vaccine. Now that's not the same as a prevention for maybe me or you, because it was all based on gene study because of it being a very, very large family. But a huge step forward. We a long way with that. With a joint project with the UK, Canada and the US, Eric, if he was on the phone, Dr. Reiman would tell you today that we're within years, short years of being able to have that prevention.
Josh King:
How should a layperson think about what is going to happen ... and it's in my family as well. That our futures will be a future where Alzheimer's will be prevented. What's going to be happening?
Jerre Stead:
It's a great question. It'll be a vaccine that will stop the clutter, to make it simple words. In the brain 85 to 90% of the time. The other thing, it's a great question, Josh, because there's been blood test available for some time that'll now start being released, to tell you and me if we're going to have Alzheimer's because it's in our family. They're up to now ... it's not been used for simple reasons. Do you really want to know if there's nothing you can do about it?
Jerre Stead:
So, that'll kick in. A priority system will get set. Then I'm optimistic, quite optimistic that, certainly before the end of the twenties decade, we'll be in a position to take care of 80 to maybe 90% of those of us that would've gotten Alzheimer's, and it's so important because you can appreciate it. Alzheimer's is the only true death disease today. There is no answer, period.
Josh King:
Yeah.
Jerre Stead:
So that shift, it's so exciting.
Josh King:
Too late for those in my family and for your mom, but I'm curious, how did your parents, long before then, influence your career and were they Hawkeyes as well?
Jerre Stead:
Yes they were. They grew up ... we grew up together in Iowa. My dad married. It's interesting. My dad married my mom on December 11th, 1941. That week after December 7th, you may know, statistically was the highest in were marriages compared to population in history.
Josh King:
People were getting ready to go off to war and wanted to get it done.
Jerre Stead:
Which he did.
Josh King:
Yeah.
Jerre Stead:
Along with millions of others. So I actually was born in Maquoketa, Iowa. My dad was stationed in Virginia. We eventually got there. Then when the war finally got over a year later, we came back to Iowa. They were both Hawkeyes third, fourth generation people, British background, German and Norwegian background. I was so blessed from a couple standpoints. I had two great grandmothers that were alive and well. One was working, running a restaurant when she was 96 years old. The other one, the Grandma Fifer was an amazing ... her body was gone, but her mind was there. Then I had two grandmothers, both who were tremendously influential for me.
Jerre Stead:
My mom and dad started, after the war, the first all purpose insurance agency in Eastern Iowa, meaning whatever you needed as a farmer, they could sell you. Independent agent. So they worked and my "nana" which was my mom's mom, kind of ran the show and she was a very strong Methodist. She was a very great teacher. When I got my paper route, I actually was ... You're supposed to be 10 when you got the route. I was close. So I was nine and got it. She was real clear. She taught me. I split whatever I kept after I paid for the papers three ways, third for savings, third for church, third to do whatever I wanted. It was a wonderful education.
Jerre Stead:
And then Grandma Stead was a teacher. She was actually teacher of the year in Iowa when she was 80. So those two were very influential and Grandma Stead ... In fact, I can see it here. When I graduated from high school, she gave me a really great thing that says, "A man wrapped up in himself is a very small package." So I still have that up there and I've kept it forever. Parents, wonderful people, believed in hard work, great values, like so many people had from Iowa, and just couldn't have been better.
Josh King:
It must have been incredible to have someone like Grandma Stead in your life as a teacher. But at some point, you got to get out of the Stead household. You and your wife, Mary Joy, both attended University of Iowa after getting married. I believe you'll be celebrating your 59th anniversary this month. How did you meet on the planes and begin to build a relationship?
Jerre Stead:
We were 14 years old. We'd moved ... she'd moved from Betendorf, Iowa to Maquoketa. I had moved from Delmar, Iowa to Maquoketa, and we met on a bus coming home from a freshman, sophomore basketball game. Actually, the only person I ever dated and vice versa. We got married the day before Mary Joy turned 19. December 26th, Christmas wedding. I'm 10 days younger than her. My favorite time a year when she's older than I am, of course then. But it was interesting. She had a scholarship in music and education at Northwestern. I had a free ride at Dartmouth to play football and baseball for Bob Blackburn, and we compromised because we didn't want to do that. That's how we ended up the University of Iowa.
Jerre Stead:
It was as simple then Josh, to get in, as you went to the register's office with the check and you were there. We lived in a 40 foot by 10 foot trailer for the three and a half, four years almost in college. I worked 40 hours a week and had great jobs. I ran survey crews and did drafting during the week. We had both of our kids there and it was just ... We were coincidentally talking about it with friends last week. Everything was great because we didn't know what we couldn't do. We just did it, and that made it pretty simple.
Josh King:
And your values weren't corrupted by spending four years in Hanover and going to winter carnival at Dartmouth. So you ended up in a much better place.
Jerre Stead:
I still tease her about Northwestern because I've been very active there over the years, including being chairman of the board of the [inaudible 00:18:59] Evangelical Seminary, which is in the middle of Northwestern. So yeah, you're right.
Josh King:
Yeah, I think you also made another five bucks a week maintaining your boss's yard. I'm wondering, with all of this industriousness in your household, is that where you began your routine of getting up at 3:15 every morning to get a run in and some work done while most of us are still sleeping the night away?
Jerre Stead:
No, it was when I got the newspaper route. Newspaper was dropped off at the railroad station, by the railroad from Des Moines to-
Josh King:
Register.
Jerre Stead:
Yep. I'd be there to pick it up and deliver. I had 42 daily papers in 71 or 72 weekend, Sunday papers. I happened to have the two taverns that were in town. If I didn't have the paper there by 5:00, it was not a good thing. So, that's how I got started and it's been a wonderful gift, and it did help a lot at the university because I get up my usual time and I go in and do the drafting work before I'd go to school. So it worked. There, then I kept ... right after we got out of the university was when I started running for the first time, because I played lots of intermural, et cetera. I didn't ever want to put on weight. So when I started in 1965, June of '65 at Honeywell, I had to do something for exercise. So I started running and have done that ever since.
Josh King:
So June of '65 is a month before I entered the picture somewhere in outside of Boston, Massachusetts. You're at Honeywell. That's NYSE ticker symbol HO1. What was your initial job there? When did you realize that these aspects of management and leadership were things that you had an affinity for?
Jerre Stead:
Because of grades and being married, et cetera, I had lots of job offers, actually 12 different job offers. We picked Honeywell for two reasons. One, I traveled all over with the interviews and I liked Minneapolis. I liked the people at Honeywell and it was as far away as we could get from my parents and Mary Joy's parents, because we had the only two grandkids. So that's why I went there. But the bigger reason, kidding aside, was that I was part of what they called a high talent pool. When I took the job, I was told that I'll have a year to work through all the different business markets, et cetera, and then I'd get a position.
Jerre Stead:
So I started on June 14th, '65. On July 5th, my year was over, literally 21 days, three weeks later, because they said, "You're now going to be the foreman at the downtown plant for the [inaudible 00:21:59] Group. You have 400 people, three shifts. Good luck." Literally. It was so funny because I had had older people work for me when I was running survey crews, but nothing like this. A hundred percent union jobs, local 1145 teachers union, and the only people on the floor except me and my partner, Seal, who did all the ... I think, back then everything was time cards the whole bit.
Josh King:
Yeah.
Jerre Stead:
We were the only two non-union people out of those 400. I had a team called group leaders that got paid literally 12 cents an hour more, but they did the coordinating with the different groups. There was seven on the first shift, four on the second shift, one on the third shift. I had no clue. The first thing I learned from Seal was that the three guys in front of me had lasted less than two months a piece, so I went home that night, told Mary Joy and the boys. I said ... We were in a townhouse. We were looking to buy and build a house.
Jerre Stead:
I said, "Let's wait, because I'm not sure how this is going to go." So I got them all together. It was the best lesson I've ever had in my life. The next day I got them all together. I said, "I have no idea of what I should do. But what I do know is I'll do everything I can if you tell me what I should do to make it work," and it works and I've always done it that way. I've always surrounded myself with really great people and then helped them accomplish what they wanted to. Wonderful lesson.
Josh King:
So your career starts in the middle of the Johnson years in '65. It's now 1987 and we're at the end of the Reagan years. You're moving to Square D where you made a quick impression on the company by setting a fire in a parking lot. What were you burning and what was the message you're trying to send?
Jerre Stead:
Yeah, so that was pretty funny. Square D, wonderful company. 85 years old at the time. I got there, had been ... not had been. Was the leader in residential commercial circuit breakers in the world, et cetera. But 85 years old, very industrial oriented. The second, third day I was there, this young guy came in. Probably at the time he was older than me, and gave me two bucks, Josh. There was over 400 policies and procedures. He said, "You're the only person that gets these." I said, "Good to know."
Jerre Stead:
So I took them home that night, started reading through them, and realized they were probably the worst weapon I could think of to not let people do their job. So the next day, I came back, I took our leadership team out and I burned them in the parking to prove a point for our entire organization, which is policies, procedures, processes, you need them, but you need them to be tools to help people be successful. So, that's what we did. I then, with that team handed out ... I think we had 12 buckets of policies and procedures and said "Josh, you run manufacturing. You get these. Think through, start with you have a hundred percent respect and trust of every person you got. Now tell them what you need to do with policies and procedures to be successful."
Josh King:
I believe, Jerre, that the first company that you actually brought public on the New York Stock Exchange was Ingram Micro. At the time, it was the largest IPO biotechnology company in history. The 1990s where a period of change for tech in the markets. What was that experience like and did you take any lessons away from it?
Jerre Stead:
Yeah, it was really great fun. One, it was a fast growing company. We grew it from ... when I got there, it was 8 billion. When I left, it was 32 billion, four and a half years later.
Josh King:
Wow.
Jerre Stead:
Fastest growing at the time, fastest growing Fortune50 company in the United States. I learned a lot there. One, very tight margins, Josh, because when you're a service provider distributor, you don't miss a penny on anything. I learned three things. I relearned again, the only way to make this happen as fast as we were going to grow was to surround myself with really great people, spend my time helping them be successful, really critical, point one. Point two, or us to be global, I was going to have to do acquisitions to grow quicker than we were in Europe and particularly in Asia.
Jerre Stead:
So we acquired a company in Australia, acquired a company in China, which was interesting. It was a Singapore public company that I acquired because. At that time, they had their own company inside of China. So, that was the way I got into China. I had a partnership with SoftBank. I was on the SoftBank board at [inaudible 00:27:37] because didn't want to compete with them in Japan. That's what he was doing then. He had an incredible machine, had all the Apple products, et cetera in Japan.
Jerre Stead:
Then we acquired another company in Hong Kong to close that whole loop up, including the acquisitions we made with Europe too. So, that's the place ... I've made a lot of acquisitions at Honeywell [inaudible 00:28:07], but became clearly strategic to be global. I had to make those acquisitions. We learned how to do that really well and we created a machine. If you think about growing that fast, we would have two to 250 new people on our company team every week. So we had to create a machine that attracted people, got people excited, kept people, trained people and developed people.
Jerre Stead:
We did a couple of interesting things. We had Impulse, which was our own ... At the time, we were doing a couple million transactions a day and it was our own inside system. I had great people working for me. I mean really great ones in the IT organization. We had to learn how to manage that. So the thing that I'll never forget was sitting actually in this house in 1999, December 31st. If you remember Y2K, not having clue if we were going to be alive with that whole system the next morning. First one happened to be New Zealand. That went well. Boom, boom, boom. We hit Japan and the bank that we were doing business with went down. So we stayed back up.
Jerre Stead:
I'll never forget that because what we did in '98 and '99 was incredible. We converted everything, brought it all up to speed, didn't miss a beat and kept growing, and it was great fun. The other thing continued to learn always is that you treat every person, every place in the world with equal dignity and respect. I do operate with a hundred percent trust of every person. That worked in every one of the companies I've led, worked great. Last thing with Ingram Micro is, when you scale up that fast, you will make mistakes. If you don't, you're not moving quick enough. I learned that it was fine. I would applaud people for taking a risk, making a mistake. You can fix anything. Josh, if you make a mistake, you just change priorities, allocate resources and move on. So, that helped me create an environment even faster than of rapid growth.
Josh King:
I want to talk about speed as it relates to Ingram Micro and another dimension for a second. You mentioned that your parents put out a shingle, I guess as, as insurance agents in Iowa. This sweatshirt that I'm wearing is from Willis Group, which is what I joined in, I guess, 2009. The then CEO, Joe Plumeri, had been named CEO of Willis in late 2000. It had been sort of sitting in private equity for a long time at KKR, and Joe said, "I'm going to bring it public quickly." People said, "What, a couple years?" "No, give me six months." He ended up doing that.
Josh King:
I noticed that it took about five months between you being named CEO of Ingram Micro and its IPO. This is also I think the same timeframe used when combining Churchill Capital with Clarivate. Do you think rapid transformations work better than a slow process? What I'm always told inside ICE is slowness is the enemy of any deal or time is the enemy of any deal. So you must have been a young man in a hurry back with Ingram.
Jerre Stead:
We always did that. Yeah, and I'm a huge [inaudible 00:31:43]. Here today at Clarivate, they talked about Jerre Stead, and that's what we try to operate with. It works and it worked there at Ingram Micro. A quick side comment, it was so interesting taking them public because we chose to do it actually the week of the election in '96. My friends at some of the bankers ... I'd already had other public companies, obviously. Some of my banking friends, particularly at Morgan Stanley, John Mack was deeply involved with me because we were leading the big one, said we should wait to see what's going to happen with election.
Jerre Stead:
I said, "No, we're not going to wait because we got to get moving. We got to get started." We were booked four and a half times what we did with the IPO and it happened to be Bob Dole versus Bill Clinton. I love Bob Dole. He's a national hero. I know him well, but there was no question of what was going to happen. So we just let it rip and it worked. I've always done that with every company I've ever led.
Josh King:
You led another company that we're going to get to. It's 2000 Jerre, you join IHS as chairman, but you lay out a condition that you will not be asked to be the CEO. I'm curious how that worked out for you.
Jerre Stead:
Yeah, because Mary Joy and I moved 23 times over our career. We had just moved in '95. I was running Legion, went through a semi hostile takeover, sold the company for $49.50. I was 18 when I got there, sold the company and we'd only been there 18 months, 17 months. Mary Joy said, Josh, "Any place you want to go is fine with me and I'll go with you, but we're going to find a home that will fit where we're at." So that's how we ended up in this house and that's how we got this house built. It's been this center of us since then.
Jerre Stead:
So the one thing that's kind of important on this house is that the top of the roof is 25 feet above the ground. Mary Joy unfortunately was up there and fell off while I was traveling. Blew up her right leg entirely and crushed her back. So we went through 11 surgeries while I was leading that speed with Ingram Micro. I promised her, after I think the ninth surgery, that when I was done at Ingram Micro I'd take a rest, do something different. We'd relax together.
Jerre Stead:
So the deal was real simple, which was that I promised her I would not be CEO. So I was executive chair and we actually took it public in November, also in that case of 2005. I did it as executive chair. Turned out that the CEO we had, good person, wasn't going to be able to probably go as quickly as we needed to. So then I had Mary Joy's permission to step into CEO. Never break a word with the wife ever.
Josh King:
Never.
Jerre Stead:
Never.
Josh King:
I wonder if there were any other deals made with Mary Joy between then and 2016, because it's then I think that you are working with Lance Uggla to merge IHS Market, to form IHS Market. Recently, Lance, we saw it in the news just two weeks ago, agreed to sell IHS Market to S&P Global for the biggest deal of the year, 44 billion, about 2.5 times the market cap of the company's value from when it was formed. As you watched that deal come across the ticker and the news start to bleed out, what were your thoughts on it?
Jerre Stead:
So my thought was ... let's see, 15 years, 48 times, not bad return. I've been blessed over the years. I've always given ... Every public company I've led has done 28% compounded annual return over all these years. That made me so proud. The other thing, it was a great question that you asked. I think the real measure of our success like mine is, after I'm gone, have I built a company? Have I found the right leaders, and one that's sustainable and keeps getting better? I've been blessed to be a able to do that. Certainly what we did with the IHS Market and what Lance did is wonderful.
Josh King:
Now Lance probably made a deal too to take some time off, I think.
Jerre Stead:
He's going to.
Josh King:
After the break, Jerre Stead, executive chairman and CEO of Clarivate, and I are going to discuss how Clarivate his current venture is transforming how innovators are accessing the insights and analytics that they need to transform the world. That comes up right after this
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Josh King:
Welcome back. Before the break, Jerre Stead, executive chairman and CEO of Clarivate, and I were discussing his career over five decades leading to becoming the CEO of his current company, Clarivate, NYSE ticker symbol CCC. Jerre, when you step down from IHS Market in 2018, you're already thinking about launching a SPAC. What drew you to this investment vehicle that in 2020 is now showing itself to be all the rage?
Jerre Stead:
Michael Klein, who had been on my board at IHS had called may actually June 14th of 2018 and said, "Have you thought about doing a SPAC with me? I never wanted to do one unless it was you." I said, "I don't know, because you need to tell me what it's." Literally, because I had not paid attention to it. From January through May, I've been helping actually TBG with another business get started for something to do. It was so interesting.
Jerre Stead:
So Michael flew in, he explained to me what it was. I said, if we do it, here's the way I do it. I'm obviously going to take an information based business. We have a lot of things that I've looked at over the years. There's a person that's worked with me for 20 years, Cheryl [inaudible 00:39:49]. She's on my board now here and Cheryl's done great research, best I've ever had great strategist. We had things we'd looked at that we'd chosen for different reasons not to do.
Jerre Stead:
So I said, if we're going to do it, my goal will be to do what we did at IHS and IHS Market, but do it much quicker from what we've learned. With the change of technology, again Josh, like we were talking, think about it. When I started in 2001 with IHS, that's a long time ago, technology wise. So I said, if we're going to do it, we'll do it and do it faster and better. Also, define pretty crisply, if you go back and look at the 4F that we filed, you could almost figure out exactly which was going to be [inaudible 00:40:45].
Jerre Stead:
We raised 1.2 billion in two days. We took 690 of it and put it aside, obviously as a SPAC. Cheryl and I had happened to be in London that day, visiting F&B, Patrick Heley, one of my good friends, the CEO there. We were talking about two platforms that he owned. In that conversation, I get a call from Michael saying, "Jerre, Onyx just called me to see if we'd be willing to talk to them about Clarivate." I laughed and said, "I had a handshake with Jim Smith in 2012 to acquire what became Clarivate with one exception." Michael was-
Josh King:
It was then the intellectual property and science business of TR right?
Jerre Stead:
That's it. Michael remembered it because he had been on my board. I actually had the board ready to meet and give approval if Jim got the handshake confirmed by his board. So I said, "Would we talked to him? Absolutely." So we actually stopped the travel we'd planned, came back, met with them at dinner October 14th, 2018. Onyx and they were representing [inaudible 00:42:13]. There were six of us at the dinner that night, and it was clear that there was an opportunity to do something that could really help change the world. I don't want this to sound silly, but one of the things I had said to Mary Joy to do this one again ... By the way, she calls it my hobby.
Josh King:
It's good to have hobbies that multiply by vast multiples over the years.
Jerre Stead:
If that's what she wants, it works. So what happened was, it was so interesting that night because I could just feel this thing was going to play. When you do stuff as long as I've done it ... So you knew we had a great opportunity to do it, but then we had an enormous amount of work to get done. We announced it on January 14th of 2019, closed on May 14th and went public, as you reminded, us on May 15th, on the NYSE. Work through that, we did a couple things that I felt were critical. If you look over my career, you'll see that, when I was CEO of a company, I've never sold any shares. I've gifted 90% of them to charity, but I've never sold a share while I was CEO.
Jerre Stead:
So I said, one of the things that'll help us a lot is if I say I'm going to be locked up for three years with all of the shares that I've been granted as part of the SPAC, which we did. I think that started to change the way that works now for the better, by the way. I've always operated that way, Josh, which is everything we do has got to be a return that I'm at risk for any return I get if I don't deliver for the share on it.
Jerre Stead:
So, we did that. We got started. Worked hard to get things ready to go. As I said, closed on May 14th, took over as CEO, and I've never enjoyed this. My team knows it this most fun I've ever had one because we're, we're getting a lot done. We're getting it done fast, but to be in the center of end to end solution, actually the only one in the world today for research and to be able to help with life science and make an incredible difference to be able to manage IP for companies all over the world, better than anybody's ever done. And then with the web of science, for universities and AC academia and government, that's something I love doing.
Jerre Stead:
I loved every company I've ever led, but this one is making a real difference. Of course, my affinity to helping from a life science standpoint is huge. So it's just been great fun and we're just getting warmed up.
Josh King:
Just getting warmed up, Jerre. For those initial months of 2019, until it went public in May. This week, for example, Churchill Capital five, the fifth SPAC to come out of the group that you worked with on the original Churchill Capital Corp listed on the exchange. This year has also seen several successful SPAC combinations. Based on this phenomenon that you had to ask, "Well, what's a spec" when it was first introduced to you, what's been your experience of how a SPAC merger differs from your other experiences coming on as a new executive or acquiring a company?
Jerre Stead:
Yeah, that's a great question. What it did for us was help us get the Onyx deal done, Clarivate. We had a platform that we could put their company on instantly and that's a very big deal, Josh. They were probably two years away, at least, from being able to do it. So what they got is me with 38, 39 years of public experience. They got me with a platform that was already in place. So that to me is invaluable, and it gives me ... The other critical point of it, it gives me currency to continue to do the kind of acquisitions that need to happen with any company I've ever led.
Josh King:
Well, 38 or 39 years of public experience can't prepare anyone for a year that is affected by the coronavirus. We're in uncharted territory here. Over your career, you've acquired an integrated over 200 companies, but this year Clarivate began integrating the decision resources group just as COVID hit. How did your first remote integration go after the 38, 39 years of experience?
Jerre Stead:
Wonderful question. I was so proud. We had everything ready to go, because I travel 300,000 plus miles a year so I can touch everybody and be with them. All of a sudden, that blew up. We closed on February 28th and we had the whole world shut down by March 15th. So everything we did had to be changed and rethought of. I've never been prouder of a team that's been able to pull that off. Literally, I was just on a call before I got on with you, of our digital workforce change that we've made and are building on for the future. All of what we've learned in these last 10 months.
Jerre Stead:
I was probably more concerned about any acquisition I've ever done merger wise when I kept thinking through, wow, this has got to be entirely different. Clearly again, without the technology that you and I are using right now, none of it could have happened. If this was five years earlier, I'm not sure how it would've played out, but we were able to do it. Our DRG acquisitions done, boom, over. We had our final review meeting actually earlier this week with the integration team. I would give us remarkably high marks, and I'm a pretty high goal setter. So just couldn't feel better about what we accomplished.
Josh King:
So this year you're overseeing 9,000 employees needing to move into this remote working environment. How did the process go? Was there an impact on the company's output or business as a result?
Jerre Stead:
I'm blessed again to have wonderful people. Randy Harvey, who was my CTO, he and I and two or three others sat down and said, what do we got to do? Because we've got a lot of people in India, all of whom had work stations, not laptops. So in two weeks, we equipped all those people with laptops. We had the internet providers at our offices, signed up all of our people to be able to get internet at home. We did that all around the world. We set up 24 by seven care centers, of course, because now suddenly you don't get to just say, "Hey, fix my laptop if," it's not working. So we changed everything and did it in about a three week period, four week period, and then got smarter each day as we move forward. We were just commenting on the call before. As I walk out of 2020 now and go into 2021, it's giving us an opportunity to change the way we do this forever.
Jerre Stead:
To your point, productivity is higher than it's ever been. By the way, including me. Like I said, Josh, I traveled 300, 400,000 miles a year for 40 years. I've had two really wonderful things happen. One, I've had dinner with Mary Joy every night, since February 29th. Never done that since college, and even in college we didn't used to have dinners. We both studied. So it's been wonderful from that standpoint. But the other standpoint is I've always run and stayed in really good shape. I'm probably in the best shape I've been in 25 years because the travel, you forget. When you're as used to it as I am, you just forget how worn out it gets you. That's just a different world today.
Jerre Stead:
So that's been the blessing for me, but what we've learned then and where we're going today, we just had a review of the next steps we want to take now. We are downsizing. As you would expect, our real estate footprint a lot around the world will go from about 80 offices to 40. In fact, we'll be lights out on 40 of those offices December 31st. We're setting up module centers because people need ... The one thing, we've done a lot of surveys. I do every other week, all hands. We did one yesterday, Q and A with all of our colleagues around the world.
Jerre Stead:
One of the things ... and we do, like I said, a lot of surveys. 91% of our people felt we were doing the right things with what we've done from working from home. But loneliness becomes a real ... I get my energy from people. I'm learning to get it through a laptop, but it's an amazing change. So we've set up, out of those 40 office says we'll keep, we'll have modules that people can go to that are closer to their homes. So we never hook people up again with the ... So many of our folks in India do pick your number, but two and a half hours a day travel back and forth. We'll never do that again. It's worked remarkably well.
Jerre Stead:
The ability to do all the things we've done is just incredible and productivity ingesting, all the data is up, stays up. Output is highest ever. User up time is highest ever. So I just couldn't be happier. The other thing I learned, because as I know you know, we also did our largest acquisition with CPA, and that one I actually started on February 12th of this year. Having no clue, again, what was going to happen. We closed on that one October 1st. We did that one a hundred percent remote, Josh. All of the negotiations, all of the due diligence, everything was done like this. Again, we were more efficient than we've ever been before.
Josh King:
Now that's a view and a strategy that I think my ultimate boss, Jeff Sprecher, chairman and CEO of Intercontinental Exchange, might take some exception with. He's talked a lot on the analyst call after we announced this 11 billion acquisition [inaudible 00:53:50] that even amid the pandemic, he had to put on his mask, get on the plane, go out to California to kick the tires of the company that he was buying, to look the people that he was going to be working with in the eye, to get to know them in a way, frankly, more than you and I can do on these screens.
Josh King:
So I'm curious, how do you come away with a meeting like this with a sense of that human connection to say, not only does the due diligence line up, not only do the decks make sense, not only do the numbers work, but I have a real sense of this person and this management team that we're going to be merging with?
Jerre Stead:
I would've been in a hundred percent agreement with him, had I not been going through the DRG acquisition. Even then, if you think what happened. I met with Leonard Green, February 12th about acquiring CPA. I met with them one other time, that was it. To your point, the top two members of their team and their great company flew out to Scottsdale. We set social distance, the eight foot with mask for four hours, to talk through everything. I wouldn't have done it and they wouldn't have done it without that four hours.
Jerre Stead:
Now it was interesting because, as they walked out, one of them, John great guy, reached to grab my hand to shake it. I pulled away and I said, "We'll have a day that we can shake hands." But, but I think honestly, had we not done that, we couldn't have pulled the rest off. The only thing ... I gain more respect every day, because we've also done three tuck-ins while we ... four tuck-ins, sorry, including the one with Korea last week, that we've done all of that too. When you set your mind to doing something, you can do it. I can tell you right now, if someone asked me, I'd say this guy, Josh is a great guy, is one I wish I knew better and he's straight shooter. I can do that. I'm sure you can too with people today. So no, in deference to Jeff, I understand, but I've done it that way and wouldn't be hesitant to do it again.
Josh King:
As we wrap up Jerre, as technology continues to remove the effective distance, just as you were describing the way this year has gone down for you and your team, what impact will that have on innovation and bringing products to markets? Again, this tension of people in a room around a whiteboard, arguing and coming up with creativity that you think is only possible by sort of people face to face, even social distance. They're doing it remotely. How do you see it working going forward?
Jerre Stead:
I think these remote locations that we'll have set up all over the world are critical, because that does give us the extra energy level with people. I will say this, like I said, the productivity's higher than I could have ever guessed. Highest I've ever seen. Innovation, I'm very proud of everybody and what we've done. We introduced more new products in Q3 and Q4, Josh, this year than have been done in 20 years before with Clarivate. We've done it.
Jerre Stead:
Unknown to me yet, and hopefully I will stay unknown is, if it went too long, what happens? Do people get too burned out? We've made sure we provided our folks, as I'm sure most great companies do, with all the mental health support, we can give them, et cetera. But that's the thing I'm eager to get behind this because now we've learned, and that's what we talked about, about the digital first workforce, is we'll be more flexible than ever before, which is critical. I feel good about that, and yet we'll have the ability for the colleagues to get together when they want to.
Josh King:
In addition to some of the big deals and big companies and big opportunities we've been talking about in our conversation today, Jerre, with whatever extra time you have between that and dinners with Mary Joy and the running, you've also funded dozens of startups over your career. How involved do you like to be in these investments and what are some of the big ideas percolating at the startup level that you're excited to see scale?
Jerre Stead:
Great question. I tend now to focus on things that will make a difference medically. Not tend to, I've done it on purpose, Josh. So there's one that you should watch. It's called [inaudible 00:58:45]. We started ... this is a great example. I was at University of Iowa on one of the boards that I'm on. A young guy who had helped get the scholarship there, chemical engineer came in and we had breakfast together. He said, "Do you know that I just won, with a group of people, the rice entrepreneurial award this year?" I said, "You're what?" Because that is that's Mecca, right? Turned out very sharp young doctor that had an idea. Long story short, I said, "We're going to take this one public someday."
Jerre Stead:
So I funded him, hired a wonderful guy, Allen Ziegler. That one is at the point where it won't end up going public. It'll be bought by one of the really big guys that do this, and it's going to change the world. Not going to, is. It got preventional approval this week with the FDA. It will be the first non-invasive electrical adjustment for the heart that's ever existed. They've been accurate a hundred percent of the time, Josh, a hundred percent.
Josh King:
Sits on top of the skin or-
Jerre Stead:
It's done from the outside in. Yeah.
Josh King:
Wow.
Jerre Stead:
It's so exciting to see. Doctors will be able to do five or six a day instead of one or two of the fibs a day, and a hundred percent accurate. So that one was a dream and a doctor. The one thing I feel bad about, a couple years after we started, he called me. He said, "Jerre, I want to sell some of my shares." I said, "No, you don't. You don't want to sell shares." He said, "No, I do. I got to finish doctorate." So I bought share from him. I'm going to give them back to him, the ones I bought because this one's a grand slack home run. It's multi-billions. So, that's the kind of like doing flip side.
Jerre Stead:
Another one that we just started also happens to be in healthcare, is a young group of folks out of San Diego who are starting, because of COVID, to rethink how to manage a hospital. As you can imagine all software, that's a fun one. [inaudible 01:01:17]. Probably my favorite is a company that ... It's a long story and I'll make it really quick. MD Online was the name of the company. I met the guy because of a friend said, "Yep, I'm going to start it. I'm going to fund it for you." I had him, Josh, call Mary Joy. Bill [inaudible 01:01:37] is his name. I think he was three or four times winner of the ENY fastest growing company. I had him call Mary Joy every two weeks for payroll.
Jerre Stead:
He had to explain to her how he was doing with the project. I did that because I wanted Bill to understand, which he learned beautifully. We sold that I think for 250 million, five years later. Every person in that company got shares from it. So every one of those that I've done that way, this 29th one, there's four that failed. You actually learn more from the four that fail about what you should have done different than the 25 that made it. But I love doing it. I try to stay as far away as I can from them and let them call me because they're going to make it. I've done that. So proud of them. That's just so far to see and I love creating jobs.
Josh King:
Have you ever quantified how many jobs you've created over the course of, what, 41 years as a public company CEO?
Jerre Stead:
Actually, it was interesting. Jim Smith, I met with just before he retired, because I've known him so long. [inaudible 01:02:54] him at Thompson. Jim had someone calculate how much equity and funds I've raised over the years for [inaudible 01:03:06]. It's a big, big number. So, that got me thinking about what you said. So I tried ... I can tell you, but I don't know exact turnover of each company. But I can tell you it's well north of 400,000.
Josh King:
Amazing. After all that, we're talking into your fifth decade, is there another chapter beyond Clarivate?
Jerre Stead:
Well, I have a new goal now. Lance, that was 44 billion. I've got to get to 45 billion with Clarivate before I'm ready to think about anything next.
Josh King:
All right, gauntlet thrown down. This is going to get it. We're going to send the link of this to Lance and see what he thinks about it. Because he'll have to go in for 46. Jerre, thanks so much for joining us inside the ICE House.
Jerre Stead:
My pleasure, Josh, and thank you very much. Great to be with you. Take care.
Josh King:
Thank you. That's our conversation for this week. Our guest was Jerre Stead, executive chairman and CEO of Clarivate, NYSE ticker symbol CCC. If you like what you heard, please rate us on iTunes so other folks know where to find us. If you've got a comment or question, you'd like one of our experts to tackle on a future show, email us at [email protected] or tweeted us at ICEHousePodcast. Our show is produced by Pete Ash with production assistance from Steven [inaudible 01:04:30] and Aaron Wolf. I'm Josh King, your host signing off from the library of the New York Stock Exchange. Thanks for listen. We'll talk to you next week.
Speaker 1:
Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor is affiliates make any representations or warranties expressed or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.
