Just as magazine publishers are no longer focused just on magazines, today’s publishing leaders need a more diverse set of skills than their predecessors, from technological expertise to financial know-how to adapting to the run-and-gun pace of today’s publishing industry.
While core leadership skills remain the same, today’s CEOs need a new bag of tricks. “People skills are first and foremost, that’s something that hasn’t changed,” says Cam Bishop, president and CEO of Ascend Media . “But today you need an understanding of technology and how to apply it to the business. It’s not just a cost center, it’s a strategic asset. We’re still a work in progress here but everything relates to technology and how we communicate with employees and customers with technology-based products.”
“If you go back 10 years, most CEOs were coming out of finance because they were the biggest rainmakers,” says Malcom Netburn, founding partner of consultancy NetBurn McGill and former interim CEO at Chemical Week Associates. “They were putting at the top either the guy who generated the revenue or the guy who controlled the revenue. That model is changing as we speak. The source of revenue, whether trade or consumer, is less dependent on the advertising platform. The complexities of not just ownership but managing a much more complicated environment doesn’t necessarily mean the CFO is well suited for the task at hand anymore.”
That applies to the consumer side as well. “When I began in the magazine industry 30 years ago, it seemed as if the most important focus was on sales, ” says Christie Heffner, CEO at Playboy Enterprises . “It was the top sales people who received the most compensation and frequently moved up the corporate ladders. Over time, the sales focus evolved into more of a marketing focus.”
Andy Goodenough, CEO of Highline Media , has a publishing pedigree that dates back to his grandfather’s magazine company that launched in 1942, and has witnessed the changes at the top, including the effects of private equity players. “Today the mission of the publishing CEO appears to be opposed,” he says. “On one hand, the CEO has to be chief revenue architect, has to know how to grow business, and that goes back to the old saw that ﾑyou can’t save your way to prosperity.’ On other hand, the CEO has to be a tight-fisted cost manager. At Highline, we have plenty of investment capital and the way we get permission to use that capital is if we’re very tight-fisted and very careful about how those dollars are invested.”
Others see the business, rather than the CEO position, as the component that’s changing. “I don’t think the CEO skill set has changed all that much recently but what I think has changed, significantly, is the industry,” says Cygnus Business Media CEO Paul Mackler. “There was far more visibility to forecasts 10 years ago;not so much today. A publishing executive today has to understand publishing, trade shows, online and understand how to go to market in a very different way, because the buyer wants to know different opportunities;not one particular product.”
Relating to employees is still what matters the most for Mary Berner, CEO of Fairchild . “The first skill is to attract and retain talent,” she says. “You have to personally get other people to execute. You have to be a good seller internally and externally, and you have to be trustworthy to build a team to run it with you.” Fairchild has an executive committee of 10 people who run the company with Berner.
Where New Leaders Are Coming From
While many of today’s CEOs continue to come from the sales side, they themselves see a change brewing in future leaders. “Either we’re seeing much more sophisticated advertising and finance guys who have built up their skill sets to accommodate the new model or we’re seeing people coming out of other functions, such as chief content officers and people with experience building brands” says Netburn. “We’re seeing more people outside of publishing taking top jobs because they’ve been living with brand expansion at other industries for years, while publishing has been unbelievably behind the times in that regard. We’re seeing more people out of content, out of high-end technology and there is a lot of discussion about people coming out of direct marketing who are used to issues of audience development.”
There is also a narrowing of the separation between publishing executives and the rank-and-file. “Today it’s less of an ivory tower thing,” says Berner. “You have to relentlessly communicate the vision. We give employees a ton of exposure to top management;they can come from anywhere. Berner says that at a recent “employee idea day” at Fairchild, an employee working in the mail room presented an idea to Fairchild executives that earned him a full-time position in the circulation department.
Private Equity Influencing Skill Set
In recent years private equity firms have emerged as the owners of publishing companies while the number of purely strategic companies has dwindled. Several observers say the equity firms are looking for skills that may be a little different from those in leadership positions at strategic players.
“With the rise of private equity, there needs to be an understanding of rates of return and leverage, and that’s relatively new,” says Goodenough. “Private equity has only been in publishing for about 20 years, maybe less. If you go back to my parents’ generation, it was not a consideration.”
Today’s executives are caught between doing what needs to be done to grow the company and develop value all while delivering within the private equity firm’s time frame, according to Netburn. “The executive they want is caught in the crosshairs,” says Netburn. “A good executive understands that value takes time to produce;you don’t get a 20 percent revenue increase overnight. That’s a big change with the increasingly pervasive role of the equity players. When Meredith buys something, they’ll give it the time it needs to grow into a long-term portfolio. With a private equity owner, you’re looking at about a five-year window. The first year, you’re learning a lot but that puts extra pressure on the next four years.”
And since acquisition is a quick way to pack on growth, CEOs need to be well versed in mergers and acquisitions. “One of my jobs at ChemWeek was to see if there were existing information products to acquire,” says Netburn. “The publishing CEO needs to be part of the due diligence team. I needed to understand the equity dynamics of acquisitions, as well as operating requirements.”
However, there’s no doubt that the profile of today’s magazine leaders are changing. “The days of long business lunches are not over but the hands-on-executive is absolutely emerging as a model,” says Netburn.
New Components of CEO Success
ﾻ Master technology
ﾻ Tight-fisted financial management
ﾻ Attracting and retaining talent
ﾻ Brand building over straight selling
ﾻ Driving value while staying within the timetable of financial masters