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A Minute With: Steven T. Florio

Steven T. Florio is President and CEO of Conde Nast Publications, where he oversees 17 premium magazine titles reaching more than 76 million readers every month. Mr. Florio has been President since 1994, and added the title of CEO in 1996.

Prior to becoming CEO of Conde Nast, Mr. Florio was appointed President of The New Yorker Magazine, Inc. in 1985, when the company was purchased by Conde Nast’s parent, Advance Publications. During Mr.
Florio’s tenure at The New Yorker, the paid circulation of the magazine increased 60 percent. Prior to The New Yorker, Mr. Florio was Publisher of GQ, where, for six years, according to Advertising Age, “he presided over one of the industry’s biggest success stories of the 80s.” Mr. Florio began his publishing career at Esquire, rising from the position of Research Associate to Vice President/Advertising Director within nine years.

Active in many aspects of the industry, Mr. Florio has served on the Publisher’s Council of the Magazine Publishers of America (MPA) and currently serves on the executive committee of its Board of Directors. He is also a member of the Advertising Council Board and its Media Advisory Council. A graduate of New York University, Mr. Florio now serves on its Board of Overseers. In addition to speaking engagements at the American Society of Magazine Editors and Direct Marketing Association, he has been a guest lecturer at Harvard, Yale, Rice, the University of California at Berkeley and Columbia.

HARBUS: Your publishing career has spanned many roles, including Account Executive, Publisher, President and now Chief Executive. What do you most enjoy, and what challenges do you face leading a highly visible yet privately-owned media company?

Steven Florio: Everything you do gets scrutinized, and the press is interestingly fickle. At first I was the boy-wonder who was the new President and CEO of this big, glamorous company. And then of course, because they’re tired of writing about how great you are, they have to tell everybody what an awful guy you are. You’ve got to take both with a huge grain of salt. I never, ever thought I would be a public personality.

Actually, there’s a funny example in the fact that I’m not supposed to have salt- I’m on a medication, and, you’re just not supposed to have salt with it. I was in our cafeteria the other day, and I said to the person there ‘you know, you’re serving all this food full of salt, even the French food table is full of salt.’ And sure enough, the next day I pick up the New York Post and it says ‘Florio annoyed about French food’ [laughs]. I would say that one of the things that I enjoy is trying to keep things balanced, especially around the image of the company in the outside world.

I also love working with extraordinarily talented people. It’s like MGM [studios] in 1937, where you had a fairly visible chief executive in Sam Goldwyn, but surrounded by stars, by the Gary Coopers of the world-that’s very much what Conde Nast is like in the year 2003. With [Vanity Fair Editor] Graydon Carter and [Vogue Editor] Anna Wintour there’s all that mystique, but at the end of the day these people have to produce product. With MGM, unless those movies were attended, unless people bought tickets, it didn’t matter how glamorous the lot was. Our famous Frank Ghery cafeteria doesn’t matter if people aren’t buying the magazines.

Is it fun to deal with celebrities? Sure it is-I’m a kid that grew up in Queens. Now, yes I’m the CEO of a big company, and I make a nice salary, and I live in a nice house, but I’m still a guy that grew up in Queens. Sometimes all I can think about is ‘I can’t wait to call my wife and say ‘guess who I had dinner with?”. Is that stuff fun? Sure it is, and if anybody ever acts like its just another day at the shop, they’re full of baloney. So that whole side of it is interesting, but again it comes down to product. It’s about performance, ultimately.

I believe we produce magazines that are of a level of quality that you really aren’t finding in many other places. Especially in public companies these days, where they’re scrimping and saving, and they’re bringing in McKinsey to figure out where they can cut, slash and burn. At Conde Nast, thankfully, the Newhouse family [owners of Conde Nast Publications] encourages me certainly to run the company as efficiently as possible, but to not be afraid to invest. I had a conversation this morning in my 7 o’clock meeting with the owner [Chairman Si Newhouse, Jr.], about increasing the size of one of our magazines. Now, in this economy you don’t hear that sort of thing happening very much in the rest of the industry. So, one of the things I enjoy is this attitude about investment in quality. It’s never a question. If we can make something better, even if it’s expensive, they encourage me to do it.

HARBUS: It seems you attribute the ability to ‘invest in quality’ and to say ‘we’re going this direction because it’s going to help us be the best’ directly to being a private company.

SF: For the 10 years I’ve been CEO, that has been the marching order I’ve given to my staff, to all the Editors and Publishers, and quite frankly the order that has been given to me by Newhouse. Now, this doesn’t mean that I don’t get memos from him saying ‘I noticed that we spent an additional $100,000 last year on Christmas parties, can you please cut this back?’. He’s not a guy who’s just standing on top of the building throwing off $100 bills. He wants the company run efficiently.

On the other hand, if I say to him we really ought to take a hard look at this idea called ‘Teen Vogue’, he’ll smile, as he did, and say ‘The rest of the industry is cutting back, and you want to do a $50 million launch?’.

And I said ‘It’s time. It is time for this magazine, it is time for line extension, and we should do it’. I have a management meeting once a week, which he [Newhouse] attends more often than not, where I presented the new magazine idea to the whole management team, which is only 6 or 7 people. I looked at him and said ‘We’re doing it’, and he said ‘Go ahead, it’s a great idea’.

Now, if it had been a public company, it would have to go to the board, and there would have to be a vote… I know you’re a Harvard MBA student, but I’ve got to tell you- working with some of those Harvard MBA’s that are in the Investment Banking business-and I hear it from other friends who are CEO’s of public companies-they will drive you nuts! [laughs] They say ‘Well, what’s the return?’ and ‘What are the margins going to be like in 5 years?’ and ‘Let’s bring McKinsey in to do a study’.

I can be a lot more nimble-not frivolous, or flip, but nimble. I’m not a big football fan, but I know about ‘calling an audible’ [calling a play on the field], and there are times in the middle of a project when you better call the audible so you can switch gears. That’s something that I know doesn’t happen enough in public companies. I know Bob Pittman fairly well, and he talked about what was so constipated about Time Inc./AOL, aside from what you read in the papers, was that they just couldn’t get out of each others’ way-they couldn’t move. They had this big board, and they had all this management, and everybody had their own agendas, and he couldn’t do anything the way he did when AOL was run by just 3 or 4 people.

HARBUS: Taking that idea of nimbleness, of being able to move and react, how has the challenging media environment of recent years affected Conde Nast, and what steps have you taken to weather the market? What have you found to be successful?

SF: It has been a tough market, but we’ve actually had two good years in a row. And I think the reason for that is the way we position our titles.

Because we have invested so much in quality titles like Vogue, Glamour, Architectural Digest, GQ, Vanity Fair and The New Yorker, when you sit with an advertiser-a GM or a Chrysler, for instance- and their resources are limited by the shape the economy is in, well, that’s good news for us.

Because in that situation you [the advertiser] can’t afford to go 6 books deep in a category; you can’t afford to buy Vogue, Harper’s Bazaar, Elle, Marie Claire and so forth. You’re going to have to focus and have some depth within the top one or two books. Because business is too tough right now for you to even wonder for a second if Harper’s Bazaar is effective or not. And by the way, it’s not-and we can demonstrate that. Therefore, go with the category leader, go with Vogue.

You can make a real case for that with almost every one of our magazines. When you’re sitting down with Thomasville furniture, you do that with Architectural Digest. Even with Wired, which has been through hell because of the fall of dot-coms, we now have market share. A lot of tech books went out of business, but if you’re in the tech business today, where else are you going to be? The number one magazine in that industry is Wired. So, this is the way we continued to position, and it seems to have worked.

We also watched our operation costs. We consolidated the back offices of all of our titles, in a service facility we now have in Wilmington, Delaware. My COO Chuck Townsend took that on as his big project over the last two years, and it has worked. So, you drive the bottom line by consolidating where you can, without touching the editorial product and without touching the marketing-neither consumer marketing to the reader, nor advertising marketing which of course pays the rent.

So that has been our strategy, and it seems to have worked very, very nicely. Even books that were marginal a couple of years ago are now profitable. You may have read about The New Yorker going into profitability-shock of shocks-after 20 years. That’s really been the core of our strategy: not to outspend our competition or go off our rate card as Hearst and Time Inc. do, but to hold our rates, to present the best products and charge for them.

HARBUS: Looking more broadly across the media landscape, with the Internet, the fragmentation of TV, etc. how do you see glossy magazines, and publishing as a whole evolving?

SF: I think what we do in producing these glossy consumer titles is so different than where I see television going. We’re constantly selling quality. I want to sit with the president of Proctor and Gamble and talk about the fact that the New Yorker has won 11 national magazine awards in one year. When I look at television, and when we challenge the [ad] expenditure in television, I would make my case against audience focus, except there’s nothing really even to point at. What is the demography of the average Survivor or Joe Millionaire watcher, and is that who you want to buy this BMW?

As much as ad agencies love television, I think that more and more, they’re realizing they’re not getting effectiveness from television. Look at the ratings of CNN before the war, and I promise you that 6 weeks after the war is over, they’re going to have the same ratings as a public access station again. I don’t think that television, either cable or network, is providing the targeted audience that the consumer magazine advertiser is looking for. I may have a vested interest in this view, but though you see BMW and Mercedes ads on TV, I think it’s a huge waste of money. But look, that is how you build ad agencies-on television, not in print. As the industry evolves, I think accountability [for ad results] will become more and more important, and that’s good for us.

HARBUS: What about changes from the consumer perspective?

SF: I just saw a piece of research that said that as a woman walks toward the newsstand, or a checkout counter that has magazines, she makes the buying decision within 4 seconds. Unless that hand comes out in 4 seconds you’re not making a sale. Or worse yet, she picks it up, thumbs through it and says ‘this looks like crap’ and puts it down, and now you’ve got the soiled magazine that somebody else won’t buy.

There’s lots of noise but there’s very little music out there. I think that the more media that is out there, the more the consumer is going to have to make a hard choice, and what we have seen is that choice almost always goes to quality.

HARBUS: What advice would you offer MBA’s interested in careers in publishing and media, and how do you see the degree applying to these businesses?

SF: I think that as a Harvard MBA-and please don’t take offense to this-you have a particularly tough assignment in positioning yourself.

Sometimes there can be no ‘middle ground’ with how a company looks at MBA’s, especially from Harvard. Either they revere them-especially if you have a chairman or a president who is a Harvard MBA-or, in a lot of companies, the horrible truth is that they look upon them and think ‘ladies in waiting’ which is a phrase I read somewhere. The perception is that you can bring these young guys and women in, and they’ve got this great degree from this wonderful school, but they’ve only really been trained to be the Chief Executive. And you really can’t give them that job when they’re 25. So, I think you have to go into the interview process and stress the performance level that you think you can achieve, because ultimately that’s what this business is all about.

Another piece of advice I give people, no matter where they got their MBA, is if you are that interested in the print industry, take a course about the print industry. There is a course offered by Harvard that I taught for 23 years: the Harvard-Radcliffe publishing course, which I think is very effective for two reasons. First of all, they give you the ins-and-outs of the book business, the newspaper business and the magazine business. Second, the roster of people that lecture is pretty impressive. You get Sunny Mader from Random House talking about how to start your career in the book business. They had Otis Chandler taking about the newspaper business and his experience with the L.A. Times. I think it’s an 8 or 9 week program over the summer, and having that experience has helped a number of young people.

And at the end of the course, Lyndie Hess, who has run the program for a very long time, feels that it is truly her personal obligation to get every student a position somewhere in media that they will be happy with.

She’s called me up and said ‘I’ve found one. This woman is perfect for Glamour’. I trust her judgement so much, I’ve known her so long, that whoever that young person is, they are instantly called and asked to come up to Conde Nast, and more often that not hired right on the spot.

One way to get into the network, not the only way, is to take a course that is highly focused on the medium you are interested in. Or, something as simple as a cocktail party where media executives are invited, you go. It’s all about access.

April 28, 2003
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