As Pearson Hones Its Corporate Units, Penguin Putnam Starts Making Sense
As Pearson CEO Marjorie Scardino likes to say, “It’s hard to make complicated things simple, but it’s usually worth it.” Well, this month Publishing Trends takes her at her word, and plunges into the fearsome Penguin Putnam organizational chart to sort out the dizzying number of personnel changes, realignments, and other corporate shuffles that have come down the pike in recent months. Indeed, Scardino, along with Penguin Group Chairman John Makinson, have been a couple of latter-day Thoreaus wandering the shores of Penguin Pond, seeking to “simplify, simplify, simplify” as they busily pare and hone the company into “a club of complementary businesses.” At the same time, Pearson as a whole has put Penguin front and center as it attempts to avail itself of the publishing group’s cache of content, particularly for use in the products of Pearson Education.
All of which means an even more glorious fiefdom for Penguin Putnam President and CEO Phyllis Grann, who operates from an impressively consolidated position in the US. Though the actual lines of power may still seem boggling, it’s clear that Grann and longtime lieutenant David Shanks — who runs Penguin Putnam’s operations and juggles a half dozen direct reports himself — are doing some simplifying of their own as they trouble-shoot both editorial and sales reporting lines. The most recent appointments, announced last month and described below, only further strengthen a heretofore randomly assembled publishing empire.
Meanwhile, a far-reaching bout of streamlining has hit the UK side as well, with Penguin UK CEO Anthony Forbes Watson informing the press recently that he was striving mightily to “simplify our structure and further strengthen our performance.” Accordingly, Helen Fraser took the reins of Penguin General, Penguin Press, and Puffin, unifying control of Penguin’s three author-driven publishing divisions. Penguin General Marketing Director John Bond took control for all three divisions as well, and Publicity Director Joanna Prior did likewise. On the Dorling Kindersley side in the UK, Andrew Welham becomes Managing Director of worldwide activities, working closely with DK Publisher Christopher Davis, who reports to him.
At the moment, Scardino’s labors appear to be paying off. Pearson reported that the Penguin Group’s sales were up 13% for the first half of this year, to $575 million ($95 million of which came from DK, acquired in May 2000). Operating profits grew about 5% to $53.3 million. Underlying profit (excluding DK and foreign exchange) was up 7%. In the US, the company notes, 59 Penguin Putnam titles reached the New York Times bestseller list, an increase of 26% over the first half of 2000.
Movers & Shakers
In the interests of full disclosure, although we’ve endeavored to be completely accurate, it should be noted that even those whom we consulted at Penguin Putnam were uncertain about the implications of some of the recent changes. Herewith, then, is a summary of the latest moves:
• Adrian Zackheim’s new business books imprint — he is due to start at Penguin this month — will report to Susan Petersen Kennedy, and will be served by Viking. On the other hand, Bill Shinker’s imprint (where Lauren Marino will be joining him) will report to Carole Baron and be served by Dutton.
• For DK, US COO Skip Fischer reports to David Shanks. In the UK, Managing Director Andrew Welham is charged with strengthening the company’s position in the global marketplace.
• Clare Ferraro’s mandate includes marketing for Plume, where she and Kathryn Court now have a dotted-line relationship.
• Leslie Gelbman has taken on the NAL presidency from Louise Burke (who departed to Pocket), along with responsibility for Berkley. And Mariann Donato Caraballo reports to Dick Heffernan for sales and Doug Whiteman for marketing.
• In Canada, formerly an outpost of the Penguin UK empire that was annexed for Putnam by Phyllis Grann, Cynthia Good shares the president’s title with Don Howard, and reports to Grann for editorial. Howard used to be President of BEJO, the former Putnam Canadian outpost, and has always reported to the US.
Doubtless there will be more changes coming down the pike. But at present, Penguin seems to be faring better than the rest of the Pearson fleet, which as a whole reported losses of $195 million for the first half of the year. The media giant’s stock has fallen more than 50% from a March 2000 peak, a slide that analysts have chalked up to investor wariness about some of Scardino’s big acquisitions, as well as the southward drift of Pearson’s return on capital. As Scardino told shareholders last year, “Pearson is beginning to make sense.” Let’s hope for her sake that Penguin Putnam’s movement toward clarity endures.