Tuesday, February 22, 2011

Being a Leader & Change

So I’m back again! Yes, the erstwhile little bro..I’ve taken to writing Part 1, Part 2, Part 3, Part 4 and heck Parts 6, 7, 8, & 9 when my stream of thought overflows the 140 character limit on twitter. I find even with the extended application I can’t shrink my normal verboseness into the confines of twitter. Hence, I humbly thank my sister for being my enabler & allowing me to guest post on her blog when the whim strikes me. And, alas, it has struck me often these recent days…

Today’s topic is around change management and the impact on an organization. Recently I’ve been reading about the change at Time Inc. with the release of Jack Griffin as its Chairman & CEO. But before I delve into that I have a rhetorical question is; shouldn’t there really be only 1 Chairman & CEO in a company? Which, in this case, would be Jeff Bewkes. I somewhat understand that TimeWarner is more of a holding company with various companies comprising the overall structure. But to reduce complexity, redundancy & increase transparency why not implement a more traditional structure and have Bewkes be the sole person holding the title Chairman and CEO and then have each head of a business unit, like say Philip Kent at Turner Broadcasting System be a Vice President.

By removing the multiple layers you, may, actually find redundancies like say, a Director reporting to a Senior Director who reports to a Group Director who reports to a Vice President who reports to an First thru Fifth Vice President who then reports to a Senior Vice President who then reports to an Executive Vice President who then reports to a President of a business-line (note we’re not at the head of one business unit) who then reports into the Chairman & Chief Executive Officer of a business unit. But I digress.

When a change agent is brought in it could be for a number of reasons. The first and most obvious is because a change is needed. The second is because internal candidates are viewed as incapable or unable to view the business objectively to effectively implement change. A third is, the company needs someone with similar industry experience that has implemented a similar desired change. Enter Griffin stage right at TimeWarner.

Griffin was brought in from Meredith, the second-largest U.S. magazine publisher, where he served as CEO since 2003. The company actually thought well enough of him that they brought him back to be the CEO after he had left in 1999 when he was the company’s Vice President of Marketing. Some of the accomplishments that must have caught Bewkes attention while Griffin was at Meredith include:

• Brand Equity; As head of a group of magazines with solid brand equity but little new-media cachet he managed to make sure that old-line titles like Family Circle didn’t lose relevance in a changing advertising landscape.
• Innovative Diversification of Revenue Streams: He broadened the reach of the company to get into Consumer marketing services which translated into successfully generating a consistent source of marketing dollars, while the advertising dollars shrank under recessionary pressure.
• Cash Flow; In the last fiscal year Meredith generated $192 million in cash flow, up from $181 million the previous year.
• New Media: Last month, Meredith acquired the Hyperfactory, a mobile marketing company, and since 2006, Meredith Integrated Marketing, a unit Mr. Griffin created and then headed from 1994 to 1999, added the interactive marketing services firm O’Grady Meyers and Genex; a viral marketing company called New Media Strategies; and the health care communications specialists Big Communications. All showing that while his approach may be traditional his thinking pattern is in taking his Company from the traditional landscape to be in fighting trim for the future
• Strategic Acquisitions; In 2005, Griffin was part of the acquisition of Gruner + Jahr USA, which doubled the size of the company’s magazine business.

So what happened? Really only Bewkes knows for sure but if you start to restructure the steady trickle of news coming out of TimeWarner one can fashion together what may have occurred. Griffin was brought in as the change agent. Check. He was given authority to implement the changes. Check. He brought in outside consultants to assist him with reviewing the organization. So here’s where things start to come apart at the binding (pun intended). Apparently there were some in the organization that didn’t like the fact that he brought in consultants. I’m sorry…can any of those people tell me what organization doesn’t bring in consultants when a change is going to be made? The answer is none. At least not at the size of a Time Inc. Believe me, I’m not the first person to be giddy when a consultant comes through the doors especially when it relates to organization change. But when used appropriately, consultants can do a few things that people inside the organization can’t;
• Objective feedback; Consultants don’t have ties to the business. They’re not married to any set of processes, groups or divisions. Hence, they can serve a very valuable purpose of gathering information as a safe channel from the employees. Also, the feedback can be correlated across varying perspectives so as to avoid the colouring of someone trying to save their own skin.
• Points of Comparison; While everyone dreads the consulting firm that comes in with the same off the shelf play book that they just sold to your competitor a year ago and now that competitor is trying to undo those very changes a consulting firm can and should be able to provide management a good point of comparison based on the experiences they’ve had with like or similar organizations. Again, a company may have had people that have worked at other organizations in the past and they know what works well and what doesn’t but that’s where their feedback is included in the aforementioned bullet.
• Facilitator; They’ve done this amillion times before and they will do it amillion more times. Having them help with the facilitation and ensure that management is including all the necessary viewpoints is another advantage
• Laying the Blame; and when all else fails management can always blame the consultant.

So now you have some people upset because they’re paranoid. And in this economy who wouldn’t be? So what’s the best form of defense? A good offense. The most paranoid of the bunch will start searching for means and ways to discredit, distract or cast attention towards the perceived attackers. In this instance it could be the alleged references Griffin made in meetings to his faith, Roman Catholic. Whether Griffin actually compared Time Inc. to the Vatican or referenced having the right people in the right pew suddenly becomes irrelevant. The point is someone became offended and raised their hand. So is it the religion we focus on? No, wait there’s more…how about the decision he took to have his name on every masthead. A decision that typically resides with the magazine editor and supposedly costs $5 million dollars to implement. Really? $5MM? You mean to change a name in a Quark (or whatever they use for the format setting) really costs $5MM bucks? Wao. I wonder if they brought in a consultant to get to that figure.

And now we’ve hit on the part of the iceberg that lies below the surface because the rest we could easily see above the water line. According to knowledgeable sources cited in ADWEEK, the Editor-In-Chief of Time Inc. is believed to have his contract expire in a year. In December, longtime Time Inc. editor Martha Nelson was promoted to editorial director, which put her right behind Huey, a move that some believed was setting her up to succeed Huey. Now Huey is believed to have said that everything was honkey-dory and it might very well have been but the aforementioned can put some seeds of doubt into how honkey and dory things were with Mr. Huey.

On top of this Griffin was replacing a living legend in the halls of TimeWarner, Ann Moore. Moore had been at TimeWarner for 32 years. The last 8 she served at its CEO. While she did oversee a restructuring which reorganized Time Inc. into three business units: news, style and entertainment, and lifestyle, grouped the magazines by market and created a pool of personnel resources that resulted in the layoffs of approximately 600 staffers Bewkes apparently still felt he had to make a move even though her contract ran until December 2012 (she still shows up as the Chairman on Times web-site under the title of her profile while in the detail it states she was Chairman until September 2010 - http://www.timeinc.com/aboutus/executives/moore.php).

So Bewkes launches into the media (he had to know his memo would go public) with a ham-handed rationale of Griffin’s “leadership style and approach did not mesh with Time Inc. and Time Warner.” Really? What part specifically. Perhaps he moved to quickly but if you recognize a change is needed and know how to implement it why do it in phases? You bring a guy in to shake things up, change things around and you don’t expect a few eggs to get cracked? The extra pieces of incentive was that Bewkes had been roundly criticized for not moving quickly to replace AOL CEO Randy Falco and President Ron Grant. But wait, there’s more! According to the New York Post Executive Vice President (EVP) Maurice Edelson had complained to Griffin that he, Huey and EVP/CFO Howard Averill weren’t invited along with the top revenue contributors to a March meeting to brainstorm new revenue ideas. ADWEEK cites that,

Averill and Edelson had been sitting pretty under Griffin’s predecessor, Ann Moore. When she grouped the company’s U.S. magazines into three units in 2008, she gave Averill reporting oversight for the general managers of each group in what she called a “significant feature” of the restructuring. Moore promoted Edelson to executive vice president and made him a strategist; now, he’s listed as executive vice president and general counsel. But Griffin didn’t think that as nonrevenue producers, the trio’s attendance was required. As he spelled out in an e-mail sent to the invitees, “The objective of our off-site on March 10/11 is to gather together the senior executives responsible for driving our primary domestic revenue centers to identify the ways in which we are going to do this.”

The idea of a revolt by three remaining senior executives might well have spooked Bewkes, who would have reason to want stability at his magazine unit when he spins it off into a separate company, as he’s expected to eventually do. (The consensus is that Time Warner’s ultimate strategy is to focus on its video assets.)

You layer all of that together, right, wrong or indifferent, and it’s hard not see why Griffin was shown the door. For his part, Griffin defended himself in the media saying on Friday,

I was recruited and hired by Time Warner to lead the business transformation of Time Inc., based on my clear record of success and results in the industry…This continued at Time Inc., with the consistent and documented acclaim of Time Warner's senior management. ... My exit was clearly not about management style or results. I leave behind a first rate team and wish them all the best of success.

Since he was only there 6 months it will be difficult to tease out the specific elements he put into motion for us to track back and say, Griffin did this. But if the current management team stumbles perhaps Griffin can look back & gain some measure of satisfaction.

Until next time..Gabon!!

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