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Q&A with Stampen Chairman Tomas Brunegård

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Q&A with Stampen Chairman Tomas Brunegård

It's "halftime" for Tomas Brunegård, and by all accounts, he's in control. The Swede is rested and ready for the "second half," itching to fly into the next phase of his life with the same focused, energetic and open-minded approach he embraced while steering Stampen Media Group to new heights for the past 17 years.

At the end of 2012, Brunegård stepped down as CEO of Stampen and stepped up to Chairman of the Board of the Swedish media company. That move was in the works for years, he says.

A self-described voracious reader, Brunegård says after reading a book called "Halftime," about taking control of one's life, especially at age 50, he began making plans to change his own life. When he hit the half-century mark last year, he did so with the intention of "slightly changing paths. Well, 'slightly' is perhaps an understatement; I will change my path," he says.

Fortunately for Stampen, that new path means he will stay quite active in continuing his "childhood dream" of working in the media industry. In this case, it will mean leading the company's board and staying involved in critical strategic matters. He also will devote much of his free time to his new role as WAN-IFRA President.

That's the professional path. But his personal path means, among many things, soaring through above the clouds as a pilot and, he hopes, some day earning a commercial airline pilot's license to fly relief missions around the world. Helping the city of Gothenburg, his community. And, of course, spending time with his family.

Here he talks about his journey to Stampen, how the company transformed from the publisher of a single local newspaper to a full-fledged media company, leadership in today's uncertain media landscape, WAN-IFRA, press freedom, and more.

From burgers to media

WAN-IFRA: Tell us about the journey from becoming the Deputy COO of Burger King Sweden to entering the media world with your appointment as CEO of Göteborgs-Posten...

Tomas Brunegård: I always had a childhood dream of getting into media, but my early career went in a totally different direction. I started off as a management consultant right after university and this consulting company, which I became part owner of around 1990, actually did pretty well. So we started to invest in Burger King, but then the real estate crisis of the early '90s came. As a result, our consulting company, along with another partner in Sweden and the UK Burger King umbrella company, which had actually been acquired by Grand Met, formed the first-ever joint venture by Burger King to actually save Burger King Scandinavia.

That is how I jumped into the world of hamburgers, shakes and fries (laughs). But that was a fantastic experience for me. It only lasted for three or four years, but it gave me great insight into how a global giant works, in terms of branding and products. But I also learned a lot about how you build such an organisation and what you should not do with such an organisation.

So how could you translate that global branding experience into your eventual entry into media at Göteborgs-Posten, essentially a local newspaper publishing company at that time (1996)?

Back then it sounded a lot like, 'Wow, you came from fast food and greasy burgers into the media world?' But it was more about 'Why did you go from such a global brand to such a local company?' For me, it was more about the fact that I had gotten a bit fed up with what I saw as the negative aspects of working with a global brand... a lot of back-stabbing and corporate politics. And it became clear to me then that for the rest of my working life I wanted to work somewhere that I can actually influence both the working environment and strategy, but also perhaps have a positive influence in the community where I work, and society at large. I first turned down one job from the media industry, but when I got into discussions with Göteborgs-Posten I quickly realised that these were people who were extremely committed to what they were doing. They had a long and proud tradition, but they were also broad-minded about what is going on in society. That is what triggered me to get into media.

Historically, we have always said or heard that the newspaper business is unique, that it cannot be run like an "ordinary" business operation. What are your thoughts on that, also considering your situation at that time?

Like I said, I had a number of years of experience in the management consulting business then, and we always heard that every business is unique and 'we do things in a different way,' so I was quite accustomed to that type of argument – from everything like industrial production to retailing to whatever.

But of course a newspaper, with its tradition and everything that has to do with a free press, being the thorn in the side of various powers, does have its unique characteristics. On the other hand, my chairman at that time, who actually recruited me, once said to me – because at that time I was 33 years old, coming from the hamburger industry – 'We have all the experience of working on ink, producing quality newspapers and publishing, but we do not have the experience to truly be a brand, to be contemporary, and we need some young, fresh blood in our organisation.'

But of course, coming from the outside I felt I had to take a very humble attitude, and I did. I made a point of telling the people around me that, 'Look, I don't have any expertise in media, so you need to help me.' So I had to rely on others and say that I didn't have all the answers. From the time I started, it really has been a group effort from the entire organisation, people bringing different aspects to the equation to help us carry out our mission. But yeah, there were a lot of people who said, 'How can a guy from the hamburger industry help this company? This will not end well.'

Of course the business model here, especially in Scandinavia and in many other countries, has been very stable and successful for decades. During the first phase of my career at Göteborgs-Posten, this mentality of 'we have all the answers, we are deeply rooted in the community, people love us, this will stay as a stable and viable business for a long time' was still quite significant. Bengt Braun met a similar situation when he came into Bonnier some 10 years earlier from Procter & Gamble. [Editor's note: Braun is Vice Chairman of the Board at Bonnier in Sweden and a long-time board member of WAN-IFRA.] They referred to him for a long time as the 'soap CEO' coming in from P&G, so he met the same type of resistance and arguments as I did.

Scandinavia is known for being a tech-savvy culture. In 1996, when you started at GP, the Internet was really starting to bloom. In hindsight, how do you feel publishers in the region adapted to this change leading to the 21st century?

Well, very differently. When the Internet came around, Aftonbladet were the early adopters and we (GP) were a bit jealous of their change culture environment. Actually, one of the first things that came up after I started was the labour unions that owned Aftonbladet wanted to sell to us, but we turned it down and, as you know, Schibsted eventually bought it.

So take a company like Aftonbladet, which just sort of understood the Internet at that time... they knew they had to change. They were tech-savvy, very consumer-oriented – this was inherent in their working culture. They did a fantastic job of adapting to this change in the best and fastest way possible as a publisher. Meanwhile, the rest of us were thinking we were sitting comfortably on a stable ownership and business model: morning newspapers, subscription-based... So you could say for between five and perhaps even 10 years, that we were watching them and not adapting fast enough. But on into the 2000s we did move, and finally got up to speed and have done fairly well, or as well as we can – because this is not an easy adaptation.

So you could see the imminent change coming in the mid-'90s?

Interestingly, at that time, the Internet was not the most pressing issue. Yes, we could see it was coming, but for us what was really accelerating was commercial TV and radio, which was launched in the Scandinavian market in the early '90s.

Still, you could see that the whole advertising model was changing and that digitisation was coming then, but the big eye opener for me was when I went to Stanford University for an executive course in 1999. It was actually me and Rolv Ryssdal of Schibsted together. I think we were the only Europeans there. He was actually CFO of Aftonbladet at that time and we spent a week together, and that is how I got to know him. [Editor's note: Ryssdal is now CEO of Schibsted] That was when you could start to see that this (digitisation) would change everything, because Hollywood was still analogue but was changing to digital. So TV, motion pictures, audio, the music industry, the services industry – you could see that everything would change.

That is when I really changed my attitude, not so much in 1996 but a bit later on.

At the beginning of this year you left your role as CEO of Stampen Media Group to become Chairman of the Board. How would you define your role today with the group?

Some might say I am a 'working chairman' but I see it more as an active chairman. I have a contract whereby I spend about half of my time working for the Stampen Group. I took the decision some years ago that when I turn 50 I would change the route of my career. Then the owners asked if I would be interested in eventually taking over as chairman. And it was around that time that I also got asked if I would like to be more involved in WAN-IFRA.

So this gave me an opportunity to continue my work with Stampen and devote more time to WAN-IFRA. But as the chairman of Stampen, obviously I work closely with the CEO, lead the board, and am involved in strategy, but it is not the day-to-day operations that I did for 17 years.

Stampen's future

What would you say are the major challenges for Stampen in extending 10-plus years of success into the next 10 years?

Well, the big thing we did for our organic growth was to really change the structure of our organisation to become a media company. And we did much of that by acquisition and forming joint ventures, especially around local newspapers. We also formed a big printing operation where nobody else was, and that worked quite well.

But surely one key going forward is to participate in and observe the continuous structural development of the entire media industry to see where this may actually fit with other potential partners or other industries' activities. And especially identifying trends in the marketplace – because everything is really driven from the consumer marketplace. So how will they continue to change, because this will ultimately determine how we can build a viable business.

Another thing I think is crucial and that I tried to emphasise over the last few years is to try to get people behind you, to get motivated and understand both the risks and opportunities associated with today's uncertain media landscape. If I think back, we really had to fight against the conservative mindset. But this time we really need to get people's energy and creativity focused in the right direction. I think that is absolutely crucial in order to be successful in the next five to 10 years.

And I think we can learn from some of the new companies that have been built in this environment, like Google and Facebook. I am not looking for single-mindedness, but we do need real direction combined with some sort of purpose that is also combined with a daring attitude. It's like one of the advertising slogans we used at Burger King: 'You have to break the rules!' In that case it meant eating your burger with two hands (laughs). But sometimes you need to go where you've never been, and I think that is so key going forward.

2012 was a difficult year for many publishers around the world, and Stampen was no exception. How are things going so far this year and what are your prospects for year-end results?

When I stepped down, I basically took a break and was out of the loop for a while, so it wouldn't really make sense for me to make a forecast. But I can say that 2011 was a tough year, 2012 was a tough year and 2013 will be, too. On the other hand, Stampen is adapting like everybody else. Cost-cutting and restructuring programmes are in place and are starting to pay off this year, and we'll see the full effect in 2014. If things are fairly stable, in my view, we can get back on track.

If you look at 2007 as an index of 100 in the Swedish advertising market, we are down to under 60 now for newspapers. So there is a loss of billions of krone in the advertising market for newspapers and print products. That creates a really tough challenge: adjusting the organisation. And that is what we are going through.

On the other hand, some things are going well. Our printing operation, V-TAB, has actually picked up and doing well this year. And some of our other entities are definitely doing well.

Clearly Stampen is keen on mobile and digital and a market leader in both in Sweden, particularly on your strength: local, local, local. What is unique to Stampen's mobile services, and do you see a sort of turning point around the corner in terms of advertising revenue?

I think the industry today is fairly transparent when it comes to where the frontier is and what is going on. Yes, we believe in mobile development and we have invested in it. We have a number of partners and other players on the Scandinavian market, like Schibsted Group. Our activities are fairly sophisticated. But I think there are other countries, players and companies getting into this who are also sophisticated.

It's very difficult for us to look into the crystal ball and say the advertising dollars will go in this or that direction. Simply because it is still an unclear situation, particularly with the consumers. It's still unclear with the brand owners and the advertising agencies. So much of this is governed by what is the latest fashion and not by actual impact. I'd like to stay sort of vague on that, but we will definitely stay on the front lines of this development because we believe it has a great future – well, it is already here and has changed the media industry.

Stampen has stated its intention to invest abroad, doing so last year with Forma Publishing, Hello There, etc. What is the impetus behind this growth strategy?

The international dimension is something that I have been convinced of for many years, because the Stampen Group is close to hitting the ceiling on the Swedish market, and in some cases you could even say the Scandinavian market. For example, V-TAB is by far the biggest printing operator in the Nordic or Scandinavian region. When you reach that point, you end up in regulatory and competition issues and so on. That is one aspect of why you have to go to another market.

Another aspect is that in this new business world, it might be just as easy to find something that fits into your strategy that is based in North America or Asia. This is indeed a global market, and you can make the jump much quicker today than you could in the past.

It is indeed ambitious and a challenge, and we have not been incredibly successful so far with some of this. It takes a lot of effort, time and resources. You could say that we have taken existing products or platforms and tried to leverage or enhance them and move them into other markets. Really, it's all about learning. We came from pure local markets in Sweden and we had no real knowledge about how to do this. But I am certain in the long run it can work for a company like ours.

Are there certain products or services that make sense to 'clone' elsewhere; does that work?

This will take some time to prove if it will work, because it's a continuous learning and changing process. But what we have done so far is take our mobile platform for local media and try a joint venture in India. We took Mobiento, which has been extremely successful with mobile marketing, to a number of markets. But we also tried a U.S. launch, which really wasn't successful. So you could say that we have taken existing products or platforms and tried to leverage or enhance them and move them into other markets. Really, it's all about learning. We came from nothing, pure local markets in Sweden and we had no real knowledge about how to do this.

What about China, especially considering your strong press freedom beliefs?

First you should know that Sweden and China, especially Gothenburg and Shanghai, have had close business relations for decades. And a Chinese investor bought Volvo, so China has been on the radar of Swedish companies for quite some time – more so than other countries around the world.

We knew we could not go into China with printed newspapers, but we have a social network called Family Life that is working quite well and thought it made sense to go there and see how it goes. That was some years ago. We found a partner there, and we also had a guy working for us who had moved back to China. So we tried that, and it actually evolved into a business of selling safety products for children, and I don't think we have ownership interest in that operation anymore.

So we have taken the issue of press freedom very seriously when thinking about investing in China, and we decided to not do a couple of things. We tried in these other areas, though, but it just didn't work out.

The companies with Stampen Media Partner, as I understand it, are for the most part previously-established entrepreneurial businesses that were acquired. How are those different businesses working with one another and what is the strategy to establish synergies with the Group's other business areas (GP, V-TAB, etc.)?

Well, we've had so many strategies. It was actually Gunnar (Springfeldt) and I who kickstarted this back in 2005 and 2006, and we hired a manager for the whole business area and he succeeded me eight months ago. It's been a very successful move. We saw that things were really changing in the media industry. There are groups that are changing very quickly. For instance, we targeted women around 30 to 34 years old – they are changing the media industry. That's why, for example, we bought Family Life and subsequently bought three more social networks that have all been successful for us.

And of course one of the main reasons we did this was because we thought, 'If we can link this to the newspapers and other companies, then this will just explode into new synergies.' But that did not work. It did not work because the business logic was all somehow different. Thus it was very hard to get these entities to work together.

It was also easy to almost destroy these new 'juvenile' companies by pushing them to work with the conservative mindset of those in the traditional local newspapers.

Now there are better working relationships, but they are not totally merged and working together. We have have meetings where we bring everyone together to share ideas. Still, they work primarily as separate entities and will continue to do so.

So integration doesn't always work, or has to work?

No, it doesn't. We learned during my consultancy management work that you can clearly kill a new entrepreneurial business by trying to integrate it with an old, traditional, fairly conservative business.

At least in the early phases of a new entity you need to work separately, because it takes separate skills to work and manage it as opposed to a stable existing business.

Then again, I think we have learned a lot. Many of our journalists have embraced a new mindset. There's been a huge shift there.

Stampen invested quite a bit in the printing and distribution businesses years ago, and V-TAB's revenues still make up about 40 percent of the group's revenues. But as I understand it, this business is scaling down as newspaper printing declines. How do you do that wisely and how do you see this business developing over the next years?

That aspect of the printing industry was already there when we formed V-TAB nearly 13 years ago. It's a consolidation of the existing business. The mastering of it will not be just to print, but to close, optimise and move units. That has been the story of V-TAB from day one. We have bought many operations and closed them down. One aspect is that you need to get rid of over-capacity. You need to make sure that there is a long-term timeframe to secure print products, which means our newspapers, really. And there must be professional management so you can get good cash flow and make good profit to be able to reinvest. In the past it was all about 'How do we get more colour? How do we get the latest technology?' But the new aspect to this has been all about consolidation, and with that, 'How do we close some things down and get more efficient?'

If I look back over those years, I would say 80 percent of that effort has proved quite successful. But then if I look at 2008 and 2009, we maybe acquired a bit too much. By doing that we actually had a weakening of cash flow and profits in 2010, 2011 and 2012, but now V-TAB is back on track. And I think the whole idea is still sound. There will be a need for printing capacity for a long time. Somebody needs to operate in this area, take that risk. And I think V-TAB is a player in this market that can do this. There is so much more to do here.

Stampen achieved the prestigious ISO 14001 environmental certification group-wide last year. What has that meant to the group internally, but also externally?

Mainly, this has been an internal achievement. People want to feel like they work for an employer that wants to do the right thing, particularly with something like the environment. It affects us all, our kids, our future, their future. Gunnar Springfeldt took on this project and not surprisingly did an excellent job. It has opened so many doors. It's been a great thing. We felt very proud of this, but not so much that we can sit back and pat ourselves on the back for too long, because this is an ongoing project. But it's been great.

How does today's uncertain media landscape affect the future of management and leadership in organisations like Stampen? What does it take to lead tomorrow's media companies?

Well, there is a lot we could talk about, but I like to talk about attitude. The attitude towards the whole challenge needs to come from not an extremely naïve but not a completely blocked position: 'We know where we are coming from, and we need to figure out which direction we are heading.'

Open-mindedness is extremely important today for successful CEOs and managers. I think in the past you could perhaps be very rules-based, very figure-focused, and things probably worked in that stable environment. But in this uncertain environment, so much depends on attitude, because attitude leads to energy and energy is what the people around you will need. I think that the greatest challenge for a leader today, and I don't say just a CEO, is to actually energise your people – everybody involved in the organisation.

Then I come back to another point I mentioned earlier: the purpose of what we are doing. You have to have a clear mission.

Leading WAN-IFRA

What does it mean to be WAN-IFRA's President?

It's a true challenge, especially in times like these. I have been involved so much in the association over the years. I have been through the merger. I have been the chairman of the Swedish newspaper publishers association for the last five years. That's why I know it's a true challenge, one that you approach with deep respect and a positive attitude, because I think there is so much we can do for our members and the industry. I think WAN-IFRA is such an untapped organisation when it comes to what we can actually deliver.

I'm proud of the things we do because I think we've done a lot to be proud of, both in the past and today. But there are so many more things on the radar. So I hope during my presidency if we can both enhance and elevate the work of the organisation and everyone that is involved in this community, then we will be successful.

How can you put your 'stamp' on the association's future?

I think every president has a different makeup or background, and this melting pot of experience has served the organisation well. I have been very active in press freedom and media development. That is what I see as a core purpose of my involvement. So if we can leverage that work even more and combine that with everything else we do: the best knowledge in journalism, innovation, technology, and strategy, bringing everybody together all over the globe, but do it with this purpose high on the agenda, then I would hope that is perhaps my signature of my presidency years from now.

We've gone through the merger, so now I also hope that we can really bring people together around the world, those with very different backgrounds, beliefs, ideas and experiences, as part of a true joint effort. What I think is the worst risk to our industry is if we start fragmenting into groups and chasing different agendas. And that is where WAN-IFRA should really lead this joint effort for the future.

Tell us about Tomas...

Why are press freedom and media development so close to your heart?

For me, I think it starts with living in one of the freest countries on earth here in Sweden. Press freedom here dates back to 1766. Every country must think that we are sitting on a stable press freedom platform. But I can tell from all my years in the industry and especially in the Swedish newspaper association how we are starting to be pushed back on issue after issue – whether by the government or the EU. It has taught me that we cannot take for granted the freedoms we have today, and especially the ones we want for our children in the future. We need to do everything we can to push this forward, to do our part in securing a truly free, open and creative society that will prosper. That is one of the key drivers for me personally for getting involved, in not only Sweden but also the global arena.

I also understand you are a pilot. How and why did you get into that?

In 2008, when Lehman Brothers fell to pieces, we had just done a big acquisition of some 31 free newspapers in Stockholm. After already going through the dot-com crisis as a CEO, I understood how devastating it is when you get into one of these deep crises, how it affects you as a person. So I decided to do something that I have never done before, and that was flying planes, something I wanted to do for years.

My brother had been working as a doctor in Africa and flying around in different aircraft that I got familiar with. I started to work toward a private pilot license in 2008 and 2009. I discovered something that was very challenging, totally different, but very, very energising. I said, 'OK, I will continue down this route, continue to learn and develop as a pilot.'

That is why I have set a new target to qualify as a commercial airline pilot – not to actually work as a pilot. I would never do that, but maybe one day I can be a part of helping relief organisations flying missions to Africa or Southeast Asia, for example. But that's just a dream.

The biggest challenge I had this summer was when I flew from Gothenburg to Brighton, England, and back. It took about 14.5 hours in this single-engine plane.

You're brave!

Or maybe stupid! [laughs]

Any other 'boring' hobbies to mention?

Well, I have too many hobbies. I used to play a lot of music. But I am an extremely notorious book reader. The people who work for me get books for Christmas, birthdays, anniversaries... because I think everyone should read.

What is your typical daily schedule like? Are you an early bird?

I am an extreme morning person. I am up early, before everyone else. But since I am taking this commercial airline license course – I am taking the theoretical part this year – I spend a few hours studying every day. And I do that seven days a week, 30 days a month, to get through that this year.

I don't have the old tradition of going to the office or meetings any more. One or two days a week I do go into the office, I still have an office. Then there are a variety of other things I have going on. I have seven board positions and that takes time.

Compared to being a CEO where you worked in one office, you worked with management and had regular meetings, my schedule and time is much more fragmented and I must say that I don't really have it under control yet!

So it sounds like you have a grand plan and you sort of want to 'give back'?

That's of course true. I mean, it's clichéd but oh so true: Life is short. The thinking came from the management guru Peter Drucker, who says the big challenge for the modern person is to learn how to manage yourself. You are so used to being managed by a corporation or others, but we live in a time when people are wealthier, live longer and have more opportunities perhaps more than any generation before.

I read a book called 'Halftime' some years ago, which is about taking control of your own life, particularly at 50. And I turned 50 this past year, so I decided that I will slightly change paths. 'Slightly' is perhaps an understatement; I will change my path.

I will have a professional basis, a professional platform; I will stay involved in the media industry. But there are also other parts of my life where I want to give back.

First of all that means my family, but also society. I am very involved in a lot of things like work in the city of Gothenburg, and the pilot thing, which could help other people. I am also very involved in the church in Gothenburg, particularly in projects helping impoverished people around the world.

Every generation should try to give back, or... well, what's the point?

 

Author

Dean Roper's picture

Dean Roper

Date

2013-08-29 08:55

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