Thursday, March 7, 2013

Retweet: Adweek's "Lessons learned from Laura Lang's (brief) tenure atop Time Inc." (and comments)

The advertising trade journal Adweek has weighed in on the debacle that was apparently Laura Lang's brief time as CEO of Time Inc., the magazine division of Time Warner. Lucia Moses's short piece concludes with the one lesson I could find "that hiring a CEO with zero publishing experience to run the No. 1 U.S. publishing company was a bad idea to start with."

Moses tells of poor morale, and says Lang had few accomplishments (she links to a story about a hiring). You can read the entire piece here.

I would disagree, though, with those who believe that someone from outside publishing is disqualified to run a publishing company today. The biggest reason is simply that the industry is changing so fast that skills brought in from the outside often can be more valuable than simply having run another publishing company, especially if that company is print-centric.

Would it have been better if Time Inc. had brought in a veteran like Tina Brown? Or was the problem for some that the choice didn't come from the editorial side of things?

I didn't think that the hiring of Laura Lang was necessarily a bad thing, but in my own post on the hiring I said that others would be concerned by this. But wasn't bring in someone from the digital ad side what this was all about? If Lang had moved fast to improve the sales side of the business it would have shown that the hiring was in response to those revenue concerns. Lang then could have brought on an editorial director to allay any fears of a lack of content expertise.

Instead Lang hired Paul Caine as chief revenue officer. She also brought in Bain & Co. as consultant. Both moves, when seen together, should have raised red flags. Lang was, after all, seen as an ad person, why hire a revenue officer when that should be her area of expertise?. And why bring on a consultant, isn't that what companies do when they don't replace their chief executive and need a new direction?

But thirteen months is not enough to turn around a ship the size of Time Inc. What Time Warner must have seen is that Lang was not providing instant answers, and since the last CEO, Jack Griffin, lasted a mere six months, it was clear that firing and hiring again was out of the question.

So what is the lesson? I would say that if you are to come in and replace a CEO that had a very short tenure you have to bring stability and a sense of authority. A company needs to be able to say that they have the right person in place, and employees need to feel that the boss has finally arrived. Moses mentions that Lang maintained "a low profile" in the building, though I really don't know what is meant by this as it feels like the sort of criticism insiders would express. Having publishing experience may have helped and made insiders feel better about their new boss. But driving revenue and profits is what placates the corporate executives. Shuffling the deck and bringing in consultants actually delays achieving those goals – and if the clock is ticking, it only shortens the time you will be given to succeed.

More lessons: when your division, no matter big you may think it is, becomes a rounding error within the whole company you know you have problems. In 2012 total revenue at Time Warner was 28.7 billion, publishing accounted for 3.4 billion of that, or 11.8 percent – OK, maybe not a rounding error, but exactly an indispensable part of the business. Margins, too, were not stellar, though not a disaster: 12.2 percent in 2012, versus 15.3 percent in 2011. Time Warner, in other words, would have had concerns.

Another lesson: they say in the M&A field that sometimes the deal you don't complete is the best deal of all – maybe Meredith feels that way. But it is also true that sometimes the job offer you don't accept is the best thing to do, as well.