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$100 Million Locomotive: GE's Calhoun
Couples Up with VNU to Haul B2B Media's Future |
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28 August 2006 |
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VNU's new ownership has moved to put in an aggressive
management team focused on transforming the Dutch
publishing giant into a high-efficiency engine of profits.
At the head one now finds David Calhoun, spirited away from
General Electric's Industrial division. A locomotive man at
the head of this train is probably not a bad idea given the
strength and vision that's required to lift leading B2B
media companies into higher levels of performance. With
Michael Marchesano and Robert Krakoff pulling their portion
of the freight VNU has assembled a powerful team that will
have a lot to prove and much to transform in the months
ahead. |
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If necessity is indeed the
mother of invention one wonders at the necessity that
required VNU, a
USD 4 billion publishing company, to lure away David Calhoun,
head of a USD 47 billion
division of global giant
General Electric
in a package that doubles his effective compensation. It's a
lopsided bet made all the more interesting by Calhoun's
background. While at least one financial analyst
acknowledges that Calhoun has knowledge of media from GE's
NBC Universal division his active portfolio was
GE Infrastructure, purveyors of industrial products and
services for aviation, energy, oil and gas, transportation and
water. How does a locomotive man take on a global B2B media and
services empire?
The answer seems to come in part from his personal
references. A Wall Street Journal article
notes that former GE Chairman and Chief Executive Jack
Welch called Calhoun a "great people selector, motivator and
decisive." It would appear that if you're going to get a
locomotive man, getting one who knows how to get people on the
right tracks and chugging along is a good thing. And that's
exactly what VNU requires at this juncture. Stalled by months
of wrangling over strategic direction and ownership VNU's new
private equity investors are looking for someone who can take a
fresh look at their holdings and fashion them into a sensible
and productive business unit.
In an important sense Calhoun's experience at GE
Infrastructure come in rather handy: just as locomotives may
have relatively little to do with aircraft engines or water
solutions on the surface, VNU's three key divisions -
business information,
marketing information and
media measurement and information - are disparate units
needing to be forged into a more synergistic whole.
Calhoun's analytic abilities may be able to detect the markets,
applications and customer types that can be aligned to make to
most of VNU's assets, just as GE Industrial tries to
align its capabilities with its markets. With a portfolio
of powerful but transitioning media properties this type of
rethinking may be necessary to take VNU's holdings to a new
level of performance.
In a sense the users have taken control of VNU through
Calhoun's new assignment, saying through this seasoned
executive, "So what have you done for me lately?" Editorial and
research staffs may worry, and perhaps rightly so, but it's a
question that more trade media organizations are being asked by
their audiences directly and indirectly as B2B media faces a
broad array of new competitive challenges. The combination of
Calhoun at the top for corporate design and metrics, Michael
Marchesano in charge of VNU's "Fast Forward" program and Robert
Krakoff heading VNU Business Media promises to offer VNU a
powerful team of executives to answer that question, "Lots."
If we had some thoughts of our own to throw Mr. Calhoun's
team about what to do next with VNU in business media, they
would probably include the following few tidbits:
- Develop a sense of editorial urgency. While VNU
titles and services offer a great deal individually to their
audiences, the sum of the organization is not unlike many
other B2B media properties: balancing middling returns on the
backs of properties in need of fundamental transformation and
realignment. There are signs of advances towards melding with
new patterns of information consumption by executives such as
weblogs, RSS feeds and aggressive placement in search engine
results, but technology is not the same as attitude. In
both print and online VNU's B2B publications need to swing
for the fences and look at new ways to develop and aggregate
content from more sources than ever before in ways that are
not just chronicling the news with good design but drawing
topical communities into the VNU framework to help the trade
itself to BE the news.
- Develop more sophisticated integration of data
services. VNU's focus on audience and market metrics
provides a wide array of data services for media companies
and goods producers and also is the historical foundation of
Billboard's strengths. But how far do these services go
to make that content usable for its business and consumer
media audiences? As powerful as VNU's outlets are the
multiples that VNU's private shareholders may seek for their
investments require a strong base of content integration into
the markets that they're serving. Getting VNU content to be
ubiquitous is as much about getting data into applications
that drive its audiences' lives as much as it is about
compelling editorial content. In this sense VNU's ill-fated
shot at
acquiring IMS Health may have been a stretch too far
beyond its traditional customer base but the level of
services integration being developed by IMS could have served
as an important example for other VNU units. Expect the new
VNU team to scrutinize such workflow and lifestyle synergies
as one part of its revenue acceleration efforts.
- Don't be afraid to start from scratch where necessary.
When you have a strong portfolio of brands such as VNU's the
focus turns inevitably to making the most of what's in it
already. But in reinventing VNU there may come a point where
it pays to come up with one or more new or radically
transformed properties that serve as the emblem of where VNU
needs to go. Hopefully these efforts don't become balkanized
"new media" efforts but instead show the way towards
integrating advertising, print, events and online
capabilities with higher margins and deeper audience loyalty.
It's hard to do this when you have so many established brands
but in an era in which the strength of a brand is what it
does for audiences today as much as how it's resonated in the
past the value of established publishing brands needs to be
weighed against their ability to accelerate to their full
potential in a fast-moving marketplace.
As the new VNU team couples up with its locomotive man it
promises to be a time in which new leadership in many B2B media
companies needs strong direction to do better and to do it
soon. Will the industrial strength of Calhoun show the way to
improved margins and radically improved property performance?
We'll see what happens down the line soon enough.
-
John Blossom
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