It's famous for its real-time data on UK markets. But FTSE Group is now a global data business that generates more than 60,000 indices every day. For FD Tim Ward, that means helping a small company punch well above its weight.

Talk about free publicity. Getting your brand mentioned on pretty much every serious radio or TV news bulletin is quite an achievement. But then, the FTSE 100 has become the shorthand for “how business is doing” in the UK.

Despite this high-profile product, FTSE Group, the company that compiles the “index of leading shares”, is a really rather modest affair. It occupies a single floor of a lovely new building in Canary Wharf where many of its 170-strong workforce ply their trade. Turnover is something around £35m.

But this is no minnow. Although it’s been autonomous for ten years now, it’s jointly owned by the London Stock Exchange and FT publisher Pearson. And apart from the FTSE 100, the FTSE 250 and all the other UK indices that allow fund managers and investors to benchmark their performance, the group now generates... Well, why doesn’t FD Tim Ward explain?

“We calculate somewhere between 60,000 and 80,000 indices each day,” he says. “Most of those are close-of-play, we generate them once a day. But we’ve got about 400 that are calculated in real time. This is a global business with global clients. The people who use our data are financial services, share buyers, fund managers, sponsors – and they demand a very high level of service from us as a result of the sort of people that they are.”

So, a high-stakes, high-volume, high-visibility business. This should be fun.

9.30AM Ward’s getting ready for the morning’s big meeting. “At the end of every year, we have a management meeting to share departmental priorities for the coming year,” he says. “It’s all about getting everyone working more closely together and ensuring they can share ideas about upcoming projects and priorities.”

But he’s been hard at work for a while. “I’ve just had a conference call with our Hong Kong office to make sure they’re looking at an aspect of business continuity planning,” he says. Global expansion underpins much of the group’s work these days. “We develop by establishing partnerships with local exchanges, so it gives us a base – not a physical base, but products that are personal to the market as well as our more global products. Historically we’ve only established physical bases where we’ve seen revenue beginning to develop. And most of our offices are based in Pearson Group offices – we do pay a commercial rent, but that does makes it easier. Finally, we hire locally, so we have people who know the market well.”

10AM We settle into the big meeting room – there are about 15 people here, from department heads to more junior staffers. “We brief everybody about the corporate plan; it is not something we keep to an inner sanctum,” he says. The FD begins by running through FTSE Group’s strategic drivers for the year ahead – it’s all about growth, but with particular attention to its North American and Asian businesses. Profit, of course, is the key metric. “Our shareholders are very demanding,” says Ward as he unveils the year’s top- and bottom-line targets.

But there are several other key initiatives that will not only support this year’s financial targets, but deliver long-term success. They include support systems for overseas offices; differentiation of benchmarking products; the roll-out of 23 new Exchange Traded Funds (ETFs – sort of index-tracking shares); new partnerships; team development; and new IT infrastructure.

That last point brings Lance Fisher, the IT director, centre stage. FTSE has been working on a “proof of concept” for the new IT strategy. It’s all about showing how the group’s technology can be designed to react quickly to market demands. The company is already pretty hot on disaster recovery: after all, if FTSE’s systems go down, the indices don’t get calculated.

Fisher outlines the big challenges – and which components are most important. Questions? A great one from Victoria Davies, head of corporate planning: “How would you sum up what it’s actually going to do?” Well, the simplest ones are often the best. Fisher’s very down-to-earth, though, and has a great answer: the aim is for the technology to help the company develop new products much more quickly. Concise, clearly value-adding and operationally measurable. “The way forward will be governed by our product strategy,” says Ward.

10.25AM The FD outlines the broader remit of that business services group he runs. “Our role is to support the business in delivering on the objectives in the corporate plan and to manage any associated risks,” he reminds the meeting. I have to remind myself that this polished corporate-speak is from the FD of a mid-tier firm.

“We’re lucky in having two shareholders who are very large organisations,” says the FD later. “And we rather unashamedly help ourselves to any ideas, processes, thinking or research that they’ve done. The best example of that is the risk management framework.”

We move through legal, where questions around intellectual property and data ownership are top priority; risk – for 2006, the team want to focus on understanding cross-functional risk management; corporate planning; and FM/admin, where disaster recovery gets another look in. “We had an ‘interesting’ time when the bombs went off in London,” says Ward. “But we had a framework in place that developed as the day went on. It worked well – the markets continued to operate, and the indices got calculated throughout the day. But London is just one market out of 30 or 40 that we service, and disaster recovery is an interesting concept when you cover a global market.”

10.40AM Ward moves onto the detail of the 2006 budget. The numbers are confidential, of course, but it’s fair to say the target is stretching, and the mood seems very confident that the numbers are doable. He has a classic FD’s warning to the team, mind you: “Remember that the sales target is higher than the new business target for the year because of the rules around revenue recognition.” Don’t want to make it too easy for them...

Global expansion is driving those sales targets. “We are the leader in domestic indices in China,” says Ward, referring to the group’s FTSE Xinhua (FXI) business. “We are beginning to get some real traction there. For example, the largest insurance company, China Life, is starting to use our indices as benchmarks.”

11AM We dash to the other side of the office for a meeting with Peter Liu, FTSE Group’s head of finance. Under Ward’s governorship, the finance function has moved from just processing numbers to becoming highly responsive to what its customers – both internal and external – need. So Liu is keen to cover off the finance “deliverables” for the next couple of months. That includes management information, statutory reporting – we’re in the midst of year-end – and the accounting for FXI.

The meeting also delivers an insight into project evaluation at FTSE. Each year the corporate plan is put together with four years’ worth of projected financials – so the latest plan includes numbers up to the end of 2009. That enables Ward to deduce a valuation based on projected cash flows and test the effectiveness of each business he’s investing in, be it a regional office, a wholly owned subsidiary or a JV. “It endorses what we do,” he says. “If you’re going to bother with a corporate plan at all, you might as well work out how much the activities are going to earn you.”

And like every good FD, while Ward’s concerned about hitting this year’s numbers, he knows that it has to happen within a context. “It’s not always about maximising profit today,” he says. “You need to do that over the years if you’re going to maximise value for shareholders. You have to know if you’re taking the right risks.”

11.30AM It’s time for the FD to get to grips with this morning’s email. I’ve already seen how efficiently he runs things in the business services function, and his in-box is no different. Everything’s filed into folders based on subjects, projects or dates, so only “pending” mail is visible.

Ward’s desk – at the head of a nest of tables in the 100 per cent open-plan offices – overlooks the Millennium Dome. But from this height, its industrial setting is all too visible, with working wharves, derelict brownfield sites and building work all within sight. “I like this view,” he says. “From the other side of the building, we can look out across the whole of Canary Wharf and out to the City –?it’s much tidier. But I like the feeling of industry and development I get with my view.” Perhaps the Dome is also a reminder of the importance of those four-year project evaluation models...

11.45AM We pop round to see Sandra Steele in corporate communications, then the RealFD.net photographer gets his shots (against that neater City view). While I’m waiting, I glance over to a big LED board displaying the headline indices. “It’s a good day to be here,” says Steele. “The FTSE 250 is into record territory again.”

FTSE is a pretty open organisation for a private company. It’s got a friendly PR team, under Steele’s wing, but even internally, it’s not afraid to expose executives to staff scrutiny. For example, each member of the top team has their personal objectives listed on the company intranet. That promotes integrity and accountability – but it’s also the easiest way of making sure any issues are escalated appropriately. “This is a very refreshing organisation but you can start to take it for granted,” says Ward. “When you first come in you think ‘wow, there is a huge amount of communication’.”

12.30PM We head to a nearby eaterie for lunch. It gives us a chance to talk about how important communication has become to the FD’s role. “The more senior you get, the more visible you are,” says Ward as we tuck into our starters. “You do need to develop your presentation skills.”

Ward’s got a dirty secret, however, that helps explain his sensitivity to comms issues. He’s a former marketing director (see box). “The benefit of not having been in finance all my life means that I can see that there is another life, and there is another way of looking at things,” he says.

2PM Back in the office, and it’s more communication – email and voicemail, anyway. But I grab the chance to quiz Ward on the company structure. How does being jointly owned by the London Stock Exchange and Pearson affect his own role? “It does go beyond them being just shareholders,” he says. “For example, our financials system is hosted at the Financial Times – we’ve even got a couple of staff that work over there. We managed the inputs and outputs here – they do the transaction processing stuff.”

Of course, there are plenty of activities unique to FTSE – not least the fine art of constructing indices. It’s all algorithms and weightings. “Over the years we’ve had to expand our research and product development team because we have gone beyond just standard equity indices,” says Ward. “We have gone into bonds, hedge funds, we’ve got global wealth indices, property-based indices – and then various twists – net of tax, currency hedged indexes, all of these sort of things. Often they’re what our customers have approached us to provide.”

2.25PM Ward meets up with Jo Moore, head of business services, and HR manager Liz Storrie. They’re taking him through the key parts of the recent HR benchmarking project and the end-of-year pay rounds. The FD is keen to find out whether there’s been any negative feedback from the pay reviews via the staff survey, but in fact the process has been incredibly positive. There are still some pointers for next year’s evaluation process – many of them around (you guessed it) communication – but both managers and staff seem happy with the way things have worked. With the success of the feedback scheme, the team seems confident it can focus on a “total reward” system, in essence geared into both company performance and personal achievement. “This is a critical piece of work from an employee confidence point of view,” says Ward.

3.30PM The FD’s next meeting is with the head of legal, Costa Lakoumentas. He’s got an increasingly important job, especially as FTSE?Group swells its number of international indices. “People may take our indices, which they pay for, and turn them into something else – so do we start to lose control at that point? Costa is a specialist in IP, and I think that says a lot about how importantly we see it.”

Up for discussion are questions about the extent of the group’s activities that might attract the Financial Services Authority’s interest. It’s crucial that FTSE’s operations are totally transparent. “We are very much a neutral within the markets,” says Ward. “We have to have the integrity that shows that everyone can trust what we are doing. Any interested party can look at our rules, see where the companies are, make up their own minds. Changes to the composition of the indices are momentous for the companies concerned, but people know it is not FTSE making a judgment about the firm.” That’s crucial: dropping out of the FTSE 100, for example, suddenly makes your shares less attractive to pension funds benchmarking themselves against the index.

4PM We’re into the last big meeting of the day. FTSE Group has a five-year relationship with Unicef to support vital projects. Most of the contributions come as a form of tithe on the revenues from the FTSE4Good index, which is made up of companies that have shown a required level of corporate responsibility. It’s no small beer: last year, FTSE’s donation was around £300,000.

So we’re in with two Unicef “account handlers”. The FSTE guys are very keen that the company – and more importantly, its employees – are able to identify with particular projects rather than just a general “pool” of money. “We want this to be a corporate social responsibility and an advocacy issue,” says Ward. “We can do a lot of good by spreading the message through our staff and customers as well as through the contributions.”

The final decision will be down to the group’s charity committee. But Ward is clear on the need for Unicef to be accountable. “We agree measures and benchmarks with them to see how our money is being spent and whether they have achieved the goals that have been set on the specific project that they do.” Almost like a market index, in fact.

5PM “My hours tend to be eight o’clock in the morning until about seven in the evening,” says the FD. “The end of the day is a time for reflection and doing a little bit of paperwork, answering a few emails. I like to have cleared my mails before I go so that you start afresh each day. There is nothing better than getting ahead of the game.” It’s one I’m happy to have seen him play.

A career around the City

Ward is a very well organised FD who runs a tight ship. But he’s also flexed more creative muscles.“I spent seven or eight years getting a good accountancy grounding at Price Waterhouse. You get a fantastic view of different businesses, and I spent the past couple of years on secondment in the City. Then I joined quoted graphic design company The Michael Peters Group, where I helped out on the business side of pitches, which is probably where my interest in marketing really was kindled.

“I then did an MBA at Henley and joined a small consultancy, teaching people about discounted cash flows, valuations and how to value different lines of strategy. I worked for companies such as Unilever, which was fascinating.

“But I’d much rather be on the inside of the business. So I moved to the Stock Exchange, looking at new issues and reviewing prospectuses as head of issuer services. I helped merge two departments, bringing together marketing professionals and creating a department with a vision. I came up with the concept of TechMark and was also instrumental in the establishment of the City media centre at the London Stock Exchange.

“The FTSE Group job came about after I’d left the LSE. I came in on a project basis, and from there the conversation developed, as did the FD’s role. It’s about facilitation, guidance, asking the next question, setting out a vision.”

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