March 1 1992 by Gary M. Stern
By some accounts, McGraw-Hill CEO Joseph L. Dionne is under the gun. Sluggish earnings have sparked persistent rumors the diversified publishing company is a takeover candidate and that his job may be in jeopardy. Nonetheless, Dionne remains confident he can rally McGraw-Hill with team-building management techniques he developed during a decade as a teacher and educational administrator. Translation: While he doesn’t have a catchall answer to the company’s woes, Dionne is confident McGraw-Hill’s employees and customers do-and he’s willing to listen. “If you’ve taught, there’s an incredible capacity to learn,” he says. “We’re poised to listen to customers and to introduce technology to respond to changing needs.” On the inside, meanwhile, Dionne is looking to tap the expertise of the company’s formidable staff of information specialists.
Critics maintain there’s little new in Dionne’s recipe for success at McGraw-Hill, and little reason to believe that even skillful management will quickly lift the company from doldrums brought on by tough times in the publishing industry and general economic malaise. They say the company’s many businesses-which include flagship Business Week magazine, credit-rating agency Standard & Poor’s, and a spate of business newsletters-just aren’t pulling their weight when compared with industry averages.
One result: net profits dipped 14 percent last year to $148 million.
The counterpoint? For one thing, Dionne has a solid base to build on. Besides its higher profile holdings, McGraw-Hill is the nation’s largest publisher of textbooks and trade journals. During nearly nine years at the helm, Dionne has also refined McGraw-Hill’s marketing orientation, embraced on-line media systems, and introduced electronic media. True to his roots, he’s developing audio-visual properties to be used in schools. On the revenue side, the CEO has boosted ad rates at Business Week magazine and increased the magazine’s cover price to $2.50 from $2.
Dionne notes a difference between teaching and business. “In teaching, the students graduate and you never know what impact you had,” he said. “There’s no one to keep score. In business, you get to see the end result.”
These days in the rough-and-tumble publishing industry, that’s cause for some concern.