Business Review borrows a page from itself
Harvard magazine reorganizes as industry struggles
The questions could be lifted directly from the glossy pages of Harvard Business Review: How to handle a restructuring? What’s the best strategy for weathering a recession? Can a venerable print publication make the leap to the Web?
These are not merely academic quandaries for the world’s most prestigious journal of management and strategy, but rather a real-life case study for the magazine publisher.
Last month, the Harvard Business Review Group laid off 10 staffers as part of what the magazine’s editor in chief, Adi Ignatius, calls a complete overhaul of the 87-year-old franchise that includes reorganizing the brand’s units and making a bigger push online.
“This is not gun-to-the-head downsizing,’’ said Ignatius, a former Time magazine editor who took his post in January at Harvard Business Publishing, a not-for-profit, wholly owned subsidiary of Harvard University, an affiliate of Harvard Business School, and parent company of Harvard Business Review Group. “Instead, this was a way to end up with a team that can work across platforms: the Web and the magazine and books. We want to be able to get ideas out to people where they want to receive them.’’
Like many media and publishing organizations, the Harvard Business Review Group is struggling with a recession that is pummeling advertising revenue and a migration of readers and advertisers to the Internet.
At the heart of the rebuilding strategy is the reorganization of the three most prominent consumer properties associated with the Harvard Business School brand: the monthly Review; the book division, Harvard Business Press; and a pair of websites, www.HBR.org and www.HarvardBusiness.org. In April, the three divisions were realigned under the new Harvard Business Review Group, which has 100 employees based at the publisher’s Watertown headquarters.
The recent layoffs at the Review were unrelated to layoffs at Harvard University, but were the result of the restructuring of the three units, Ignatius said: “When you merge three units, there are overlaps and efficiencies.’’
But even with the layoffs, Ignatius said Harvard Business Review Group is growing. In the coming weeks and months, he said, the unit will be recruiting a new creative director, deputy editor in chief, senior editor, senior Web editor, assistant Web editor, and Web designer. Additionally, it’s hired a design consultant to help revamp the magazine and a Web design firm to do similar work for the website. Both redesigns will debut in January.
The restructuring at Harvard Business Review Group comes as magazine publishers are experiencing the effects of the economic downturn. Ad pages for publications in the general “business magazine’’ category plummeted 27 percent during the first quarter, according to the Publishers Information Bureau, which tracks media print ad spending.
While not completely shielded from the advertising slump - ad pages at Harvard Business Review dropped 14 percent in the first quarter from the same period a year earlier - the magazine has fared better than competitors. One reason: Its high subscription price of $119 a year gives it a revenue stream most business magazines lack. And in the last few months, the organization has been reducing expenses by cutting travel and freelance budgets to offset the advertising decline.
“No one is immune from the ad cutbacks,’’ said Geoff Klapisch, a media and advertising professor at Boston University.
Still, Harvard Business Publishing has a solid brand in the Review.
On an operating basis, Harvard Business Publishing’s revenue was about $140 million in fiscal year 2008; its annual compound growth rate is about 7 percent for the last five years. The publishing company makes a significant contribution to Harvard Business School each year consisting of royalties for the use of the school’s intellectual properties (its case studies, for example). It also pays a dividend to the school.
The combination of these two sources of contribution to the Harvard Business School is equivalent to about 20 percent of total revenue. In fiscal year 2008, the publishing unit contributed about $28 million to support the Business School’s faculty research activities.
The Review’s circulation is nearly 246,000, but if you add that to its 11 local licensed editions published in China, Germany, India, and other countries, it means that every issue is read by almost half a million people worldwide.
And the Review’s readers are a powerful, affluent group: 33 percent hold chief officer responsibilities and subscribers have a $189,153 median household income. The Erdos & Morgan 2008-2009 Opinion Leader Study ranked the Harvard Business Review as the fourth most influential magazine in the world (behind the Economist, Foreign Affairs, and Nature).
“This is for the very senior executive, the real decision makers,’’ said Boston University’s Klapisch. “It’s a real tool box for the business world professional. It serves an elite audience.’’
Purvi Rajani, vice president of product marketing and strategic innovation at
“It’s really a nice combination of theory and practice,’’ he said. “What I like is that I can read an article and the next day, I can put what I learn into practice.’’
To be sure, Ignatius said throughout the recent changes, the magazine has tried to follow the precepts it advances in its own editorial pages.
“A good example is the way we’ve recently realigned the editorial staff around ‘beats,’ ’’ he said, explaining that editors are now following specific business sectors to increase the Review’s coverage of emerging business trends. “We spent a lot of time team-building to make that happen.’’
And in January when Ignatius arrived at Harvard, he said he was impressed with how the organization methodically created scenarios so that they would be prepared to deal with a variety of economic conditions, from a Scenario A, if the economic climate was in a relatively mild downturn, to a Scenario C, a severe recession.
“It was a level of involvement that I never saw at Time magazine or The Wall Street Journal, where I worked before that,’’ he said, adding that “right now we’re somewhere between Scenarios A and B.’’
D.C. Denison can be reached at denison@globe.com; Johnny Diaz at jodiaz@globe.com. 