The large traditional educational publishers have been staking outposts (or headquarters) in urban innovation areas to tap a new recruiting pool and to help cloak themselves the aura of technological change. Cengage, for instance, is planning to move its headquarters to a building still under construction in Boston’s Seaport District after setting up its HQ in the city in 2014.
Employee turnover among traditional publishers has been a staple of the changing industry—Pearson in recent years has eliminated thousands of jobs it viewed as serving a no-longer viable traditional publishing business. That drive to appear and be innovative has led to broad turnover in employee ranks that has reached the upper levels of executive suites.
“The dilemma with all of these companies is when they’re trying to transform from a legacy base to a digital base, it’s very difficult,” said Sally Beatty, a principal at Heidrick & Struggles executive search firm.
Houghton Mifflin Harcourt CEO Linda Zecher was dismissed in September 2016 after five years by a board of directors disenchanted with company performance. HMH picked ed tech veteran Jack Lynch to succeed her and focus on improving operational performance.
McGraw-Hill Education CEO David Levin left the company in October 2017 after three years while MHE shifts its focus from vision-creation to operational performance. The company is looking outside the traditional educational publishing arena for that expertise. Levin was the most recent in an almost complete turnover of executives within the company in the past year.
John Wiley & Sons already had embarked on a company overhaul when CEO Mark Allin resigned in May 2017 for family reasons. Brian Napack, who was picked in October to succeed Allin, has both a publishing and an investment background to facilitate digital change and innovation at the company.
Demand for Change
Dayton Johnson, president of Dayton Johnson Executive Search and Consultancy, summed up the current demand for change in educational publishing executive suites as an emphasis on data-driven decision-making and a more analytical approach to product development.
In recent searches for vice presidents of sales, for instance, Johnson said companies wanted people familiar with performance measurement and using data to make decisions. For the first time, these skills were more important than experience in the field, Johnson said.
Beatty said that clients frequently ask the search to go outside the educational publishing sector in order to get a different perspective. Other areas are perceived to be more nimble, she said. That often can mean looking at ed-tech startups, which can create another set of problems, including culture clash.
Newcomers want latitude that is not frequently a characteristic of large companies, and they focus on quality of life issues. “If it is too much of a bureaucratic process, they’ll jump ship,” Johnson said.
Beatty said that she does not see an interest in tapping talent from ed-tech startups, per se, but she is seeing more interest in people who have entrepreneurial skills, but come from bigger companies. The ability to right-size product and expectations is important, she said.
Another important criterion often is what Beatty called the founder skill, or the ability to oversee a lot of people. That definitely turns the search toward executives with a track record.
Picking up the Pace
In the educational publishing sector, there is the sense that demand for quick change is coming from private equity companies, venture companies that are buying up or taking major shares in traditional content companies. They definitely are driving the focus on data and technological change.
Technology and data are driving change faster and faster across all industries, according to a presentation by CB Insights CEO Anand Sanwal at the A-ha conference in December 2017. But companies still need to pick up the pace, he suggested. Some 60% of companies take a year or more from ideation to launch of a new product.
Sanwal wrapped up his presentation with an observation from Alex Rampell, general partner at investment firm Andreessen Horowitz: The battle between startups and incumbents boils down to whether a startup get distribution before an incumbent gets innovation.
Check out Simba Information’s reports, Publishing for the PreK-12 Market 2017-2018 and State of College Course Materials 2016-2017, for coverage of the instructional materials market and its leading publishers
And be sure to visit Educational Marketer for further competitive business coverage of the school and college publishing market.