|Ann S. Moore, chairwoman-CEO, Time Inc., answers questions about the latest round of 'delayering.'
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Reorganization Puts Tim Hildebrand in Charge
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Three New Magazine Groups Formed
MEDIAWORKS: Is this the end of big changes or just another step along the way?
ANN S. MOORE: The July reorganization was a shuffle and it was a signal that we wanted to make changes and wanted to re-engineer. Right after that I set up a reorganization task force. I told corporate that I wanted three months to really study the process of putting out a magazine. Then weâ€™d spend three months in the first quarter of 2006 implementing the recommendations of that team. I heard from them that we can re-engineer, but youâ€™ve got to start at the top.
Because of what weâ€™ve done now, we will be able to cluster back-office functions on some of these titles, make faster decisions and share information more. This is not just about lopping off heads. Change the work; thatâ€™s where weâ€™ll get to real efficiencies.
Iâ€™ve reorganized my direct report. Now you have to ask that question of Nora and John. This is going to be an ongoing process because we donâ€™t have all the answers yet.
MEDIAWORKS: Until Tuesdayâ€™s moves, many Time Inc. magazines had a president overseeing all aspects of the business, including consumer marketing; now each title gets either a publisher or a president. Doesnâ€™t that eliminate a big-thinking brand champion from each book?
MS. MOORE: Each cluster has a big thinker -- how many big thinkers do you need?
Several years ago, when we lost the president of People, Nora did not replace the president there. She took it over herself. So I was sending some very clear signals that we needed to de-layer because our two most successful, most profitable titles -- People and Sports Illustrated -- didnâ€™t have two people in those spots.
At the organization level, itâ€™s hard. Thereâ€™s inertia that sets in. We have 13,000 people here. After waiting patiently for a while, I de-layered Tuesday.
This is not just about cost-cutting. This is about the need to make faster decisions and respond better. We have plenty of need for headcount and capital in growth areas. We were just top heavy in our traditional business. You couple that with the fact I really do believe in succession planning. Iâ€™m 55; Iâ€™m not going to stay forever even though Iâ€™ll stay for another contract.
The two people who do everything flawlessly are Nora McAniff and John Squires. It was time for me to kind of set them up, put them in this new job as co-chief operating officers. Theyâ€™ll have plenty of time to develop their own leadership skills. These are hard jobs and we donâ€™t do enough in succession planning and training. That naturally will result in management changes as well.
MEDIAWORKS: The latest reorganization meant losing Jack Haire, exec VP-corporate sales and marketing group, although you hoped to keep him in some other capacity; Richard Atkinson, exec VP-news and information group; Eileen Naughton, president, the Time group; David Kieselstein, president, the parenting group; and others. Havenâ€™t you let a lot of experience and institutional memory walk out the front door?
MS. MOORE: We have 13,000 people. We eliminated 105. I hopefully still have about 13,000 people who know how to do their jobs. These were wonderful people, but we had duplicative management. This was not a performance move. We are eliminating positions, not people. Some very, very good people got caught in that. We will do everything we can to get them relocated, to take care of them. It was tough. We owe them a great deal. They will be treated well.
MEDIAWORKS: Can titles with modest or negative growth, like Fortune and Time, rediscover significant growth next year, and how?
MS. MOORE: Theyâ€™re all very profitable. We had double-digit earnings growth last year; we only had single-digit growth this year. I want to make sure weâ€™re up again next year.
But you treat your mature businesses, where natural growth is slowing, differently. You have to really look at your cost base. We havenâ€™t really done that in an honest way. You can save a lot by economies of sale, by clustering things together. And weâ€™ve got to be bigger risk takers. Weâ€™ve got to be organized more strategically. Unless you cluster into bigger groups you canâ€™t get the economies.
I still believe in the magazine industry. What we do, our core competency, is trusted editing skills. Whether we do it on paper or not remains to be seen, but in an age of too much information, isnâ€™t our core competency worth more, not less?
CNNMoney.com, which launches in January, is on the right tack. Iâ€™m excited about the people running it. Iâ€™m very excited about how well SI.com is doing. I want to see that kind of excitement now on Time.com.
MEDIAWORKS: How does the Time Inc. brand measure up and compete with brands like Conde Nast Publications, Hearst Magazines, Meredith Corp. and Hachette Filipacchi Media U.S.?
MS. MOORE: Some of our individual brands are stronger than those companies. Weâ€™re significantly bigger than those guys.
[Real Simple President] Robin [Domeniconi] will now be running corporate sales and marketing as Jack did. That is a resource for our clients who want to deal with one source for all the Time Inc. brands.
Time Inc. stands for quality and integrity. Weâ€™re so broad and diversified. We are not a single sector. Itâ€™s a bigger challenge to do everything centrally. And weâ€™re not going to do everything centrally. Weâ€™re still maintaining separate ad sales forces. If we trim the portfolio, weâ€™re still always going to be big. We do have to slim down because I need to teach the organization that we need to take bigger bets or it doesnâ€™t really impact the bottom line.
MEDIAWORKS: Whatâ€™s the Time Inc. strategy for 2006?
MS. MOORE: We will continue to create, edit and aggregate premiere content for 154 magazines around the world, as well as the book group, and deliver them in whatever ways consumers desire. We will look for opportunistic acquisitions at the right price. We will continue to examine our portfolio. We will continue to invest in and develop our core brands. We will launch new titles. We will invest in high growth and potentially high growth areas line online, wireless initiatives, brand extensions and the previously mentioned new launches.