CEO DON LOGAN SUPPORTS TIME INC. TITLES AT THE TOP: PUBLISHING EXECUTIVE OF THE YEAR: MAGAZINE BOSS BRUSHES ASIDE BUREAUCRACY, REWARDS PERFORMANCE

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Time Inc. titles have consistently topped magazine industry charts in recent years, for ad page growth, circulation growth and revenue gains. Those toiling away within Time Inc. are quick to point to the white-haired, even-tempered Southerner with the bear-paw handshake sitting in the corner office on the 34th floor as the reason. Don Logan, who became Time Inc. president in 1992 and was elevated to CEO in August, 1994, is credited with creating an environment that demands and rewards performance.

For his efforts, he is Advertising Age's Publishing Executive of the Year for 1997.

In spite of his usual all-business demeanor, he has a sense of humor, as People Publisher Nora McAniff discovered when she was quoted in a recent New York Times story about the launch of Teen People.

In referring to the corporate support the new title received although the subject matter was outside of Time Inc.'s typical areas of expertise, Ms. McAniff was quoted, "If Mel Gibson walked into this office, I don't think Don Logan would know who he was." The morning the story appeared, she got an e-mail message from Mr. Logan that read, "I do too know who Mel Gibson is and I thoroughly enjoyed his performance in `Air Force One'," a movie that starred Harrison Ford.

PROVIDES SOLID SUPPORT

Mr. Logan's management style is one that marries tough demands to strong support once a new direction or project is approved and underway. It is an approach that is obviously working.

Time Inc. titles collectively have had an impressive three years, with 1997 being the strongest on record. Advertising pages are at an all-time high, up 10.3% to 26,576.66 from 24,101.54, and accounting for 11.1% of all ad pages measured by Publishers Information Bureau. Time Inc. ad revenue, as measured by PIB, was up 14.4% to $2.6 billion from $2.3 billion in 1996, accounting for 19.3% of all ad dollars measured by PIB.

Earnings for the publishing division also ended 1997 with an all-time high EBITDA (earnings before interest, taxes, depreciation and amortization) of $608 million, up 14% over the year before EBITDA of $535 million. Ad revenue gains at Entertainment Weekly, Fortune, In Style, People, Sports Illustrated and Time are being credited with adding to 1997's coffers. Those gains came on top of already strong growth from 1995 to 1996, when EBITDA jumped 12.4%from $476 million to $535 million.

Another aspect of the company that has always been a strength and which continues to outperform the industry is its circulation operation.

CONSISTENT CIRCULATION STRENGTH

"Time Inc. has the best circulation in the business, it's borne out by my own numbers. Consistently, Time Inc. has more winners by far on my circulation performer winners list," says Dan Capell, partner in consultant Gruppo, Levy & Capell and editor of Capell's Circulation Report.

Time Inc. is one of the few publishing companies that has a formal circulation training program, and assigns a consumer marketing director to watch each individual title in addition to the centralized department. As a result, titles ended the year with circulation increases, and impressive newsstand gains.

Overseeing nearly 30 titles, Mr. Logan has taken a culture that used to be bureaucratic to one that encourages individual responsibility and ties rewards to performance. Compensation for executives is tied to meeting strategic and financial objectives, and bonuses are given based on revenue gains.

"I came from a small publishing background before I got to Time Inc., so I think I came with a different perspective. Time Inc. is full of talented people who are passionate about the products, which are some of the greatest brand names in journalism," says Mr. Logan.

"I wanted to create an environment where we got rid of the bureaucracy and get people back to focusing on the core business. We got politics out of the way, threw away the organizational chart, and got people to start thinking about the business. It was not about building boxes around job descriptions, but about brushing aside the obstacles," says Mr. Logan.

Executives also were left in their jobs long enough to see results and act on ideas for growing the business. In the past, promising executives were often moved to provide them with as much diverse experience as possible. Now it is common for an executive to be president of a single title for several years, with bottom-line responsibility for that business.

FOCUS ON BOTTOM LINE

"Don wants to create variety within the magazine company. He wants to have a place where there is a lot of diversity in the ways each title goes at its business," says Bruce Hallet, president of Time.

Mr. Logan is known for keeping everyone's focus on the bottom line.

"Don's background is in mathematics. He believes in statistics and probability. He understood early on that Time Inc. could be most successful if the focus is on core titles and line extensions," says Norman Pearlstine, Time Inc. editor in chief, citing Time for Kids and Money's newsletter Retire With Money as examples. "He also recognizes that there are ways to do start-ups and acquisitions to move into new places. We did some modest things, like purchasing Wallpaper [an international home design magazine based in the U.K.], which is a different kind of magazine and a different business model. On the international front, Don's orders to me were `Don't do it unless it makes sense and we'll make money.' "

DEMANDS A CHALLENGE NOT A CHORE

The new culture, which includes ambitious yearly revenue targets for each title, is demanding. But executives universally seem to like the new demands, and point to the support they get from Mr. Logan as the reason.

"He's the most encouraging boss I've ever had. He's the least likely person to throw a bucket of cold water on an idea," says Mr. Hallet. "He really wants you to solve problems for yourself. It's hard to get him to give you an opinion on a difficult business decision. But the attitude is not that you'll get blamed if it is not the right decision. The attitude is, if it's not the right decision, you'll fix it and move on."

Mr. Logan believes those working day-to-day on individual titles are in the best position to decide how to manage the properties.

"The management opportunities for each title is quite different. Sports Illustrated and People have very different opportunities than a Fortune or Money," says Mr. Logan. "That's not to say that every idea that the magazines come up with is great. In fact most of them are bad and don't see the light of day. But that doesn't mean you don't keep trying. How I help is to encourage the environment where people feel able to try these new things, where they have the flexibility and freedom to test them, where it's OK to have a bad idea."

EVERYONE IS ACCOUNTABLE

People President Ann S. Moore is also high on Mr. Logan's new culture. Launching two spin-offs this year from the core title, Ms. Moore had to fund all the development of the prototype issues out of her own budget for People.

"We don't spend the company's money. It's off our own bottom line so it really is coming out of our pockets now that salaries are tied to performance," says Ms. Moore. "It's a prudent, smart way to do development because you are always more cautious and rigorous when you are spending your own money."

Mr. Logan also brought Mr. Pearlstine into the company as the first editor in chief to come from outside of Time Inc., a controversial decision in the formerly insular Time & Life Building.

"Both Don Logan and I truly believe the more you can delegate the more successful you will be especially with mature properties, like People, Sports Illustrated, and Time," says Mr. Pearlstine "We both felt coming in from different places that the more you can delegate, the better ideas that will surface and the fewer mistakes you are going to make."

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