At the Magazine Innovation Center’s ACT7 Experience in Oxford, Miss. in April, John French delivered one of the best speeches I have ever heard on publishing industry issues, “Life Lessons in Adding Value.”
John is the former CEO of Cygnus Business Media, the former CEO of Penton, and the former president of business magazines and media at Primedia. John has a unique perspective on publications now because he is a turnaround expert who does confidential M&A work as well. He now shares his experience as an advisor to publishing executives and investors.
I asked him and he agreed to be interviewed for my company newsletter, Ads&IDEAS®. However, as we spoke, John touched on so many points I thought would be of interest to publishers and CEOs of publishing organizations that I didn’t want to limit the audience to just my readers. Folio: agreed to feature a few of the most interesting points here.
Enjoy an abridged and lightly edited version of the interview below.
John French
Jim Elliott: What steps do you take to turn around a publishing company that’s in trouble?
John French: So, the first thing you determine is: What’s the mission? Why are we here? Is it because you want to improve the operating margin? Do you want to improve the performance of the company? Do you want to transform the management team away from the old ways of publishing and to more data and digital? Do you want to package it and, frankly, dress it up to sell it?
Let’s establish what the goal is and the plan falls from there. Then you drop in the operating goals; the first thing you do is assess your portfolio. You can’t control all these portfolios or assets, so you must take what you got and make it work.
Jim: What if your client has enough of a budget to make acquisitions?
John: I tell my client, “Let’s really understand how this is going to improve your portfolio. How does it fit into your strategic plan? How is the integration going to go? How long will it go? And bring up all the challenges. That’s the proper way to go with M&A — let’s go to the internal diligence first and see if that is really what we want to buy.”
Jim: What about programmatic?
John: The first question is not whether I accept programmatic advertising. The first question is, “Why do I have unsold inventory?” And if you have many months’ old inventory and you’re running content that people are not reading and that advertisers are not supporting, then let’s have a discussion about that before you run to programmatic. That’s what I see a lot on the digital side of the business. People are chasing rainbows here rather than taking a look at that fundamental core digital business and then growing it smartly from there.
Jim: What is your approach to assessing and improving publishing management teams?
John: It’s a difficult task to assess management because it gets emotional, especially if you have to make really tough choices with really nice people. I struggled with that early in my career. We establish a list of people on the management team. There are two columns: people that you know add value and people who are currently not adding value to the enterprise and the growth and the turnaround. And the people not adding value presently, you show them how to do it, you help them, you support them, and if they still don’t get it, get rid of them. That’s the only way.
Jim: What are some steps that publishing executives can take to increase revenue?
John: The first thing is to take the blinders off about where you think your revenue is going to come from. Often, you get, “Digital.” Well wait a minute. Maybe it’s just not digital. Maybe you’re doing okay on digital. The point is, treat all revenue the same; don’t run away from print and certainly don’t run away from the other end of the spectrum, which is data and data products. It’s all one channel; it’s all one pipeline. So don’t dismiss what you consider or believe to be old line technology to increase revenue.
If you want to replace revenue right away, go to your circulation file — your audience development file of your magazine — and make sure that you know, or can know, or should at some point know, everything about that subscriber. Tools to find these things out are not as expensive as they used to be.
Jim: How do you convince a board or a private equity board to follow your plan?
John: When you’re talking to a board, or a private equity board, or you’re talking to a private ownership group, you actually have to carry that passion and you can’t waiver at all. You cannot show weakness. If you really believe it, you have to be willing to put your neck on the line.
Good ownership, especially the private equity guys, can sniff weakness. They get good at it. You can smell when someone doesn’t have the great belief, so it’s passion, Number One. Number Two, you need to be patient and you may come up with an idea three or four times and get shot down for the idea three or four times, but if you really believe it, stay true.
Jim: How do you see the role of today’s CEO, COO, or Executive Director?
John: I think the biggest change I’ve seen is that it used to be easy [for a CEO or Executive Director] to delegate a lot of things. You kind of set the course and steered your plan. You still have to do all that. You have to have a vision. You have to have a belief and all that stuff. But let’s face it, you and I are running companies that are challenged by changes in technology. I used to feel comfortable saying I’m going to delegate that decision to my “tech person.” A CEO doing that today is making a serious mistake.
Jim: How do you improve a sales force?
John: In most companies people who are making those decisions become frozen and they can’t make the tough decisions. Management frequently tells me they would only rehire about 30 percent of their current salesforce. That doesn’t compute. Why?
I’ve seen so many situations where I’d say, “You know, we’ve done a full analysis of Jim. And we’ve worked with him. And we tried, but he’s not going to turn the coin. So, we need to get rid of him. We need to make a change.” And — this drives me absolutely crazy — they will come back and say, “I agree with you 100 percent, but it’s account XYZ … that’s his account and if we lose that, it’s a half million dollars and it changes our whole fiscal year.”
I’ve never seen [a situation] where a salesperson leaves and the account says, “Well, that’s it. Jim’s gone. I’m going to pull our $500,000 – $600,000 contract.” There was never any value to the contract to begin with if that was going to happen.
Jim: Do you care if your sales staff is direct or outside independent?
John: No, I don’t care. And it’s not just because it’s good for you, Jim. I don’t care; I’m agnostic there. When I was a publisher, sales manager, etc., I actually found it easier and more productive to manage outside sales reps than direct reps. And the reason being was, very simply, compensation.
For a lightly edited but much more complete interview, click here.
Both Jim Elliott and John French will be on hand to share their insights at the Folio: C-Summit, co-located with the Folio: Show, on Monday, October 9th in New York.
