McIntosh begins to make her mark at PRH US

McIntosh begins to make her mark at PRH US

From a small corner office on the 14th floor of what can finally be called the Penguin Random House building—in December, five and a half years after the merger began, the colony of 1,200 downtown Penguins migrated to the midtown corporate coop—Madeline McIntosh runs the US company, having been named c.e.o. of PRH US 10 months ago.

She knows the migrants well: just over a year into the merger, in 2014, Susan Petersen Kennedy was ousted as long-time Penguin head, and McIntosh, who had cycled through increasingly important Random House roles, took charge of a newly expanded (as well as restructured) Penguin. Last April, she was tapped by PRH global c.e.o. Markus Dohle for her present position, assuming a significant chunk of responsibilities that he had previously shouldered, with 12 direct reports, including all PRH US publishing heads.

Six months into her new watch, it was McIntosh who announced the latest round of restructuring. It began in October, when the Crown division was combined with the Random House Group under RH president and publisher Gina Centrello. Division head Maya Mavjee was let go (promptly scooped up by Macmillan c.e.o. John Sargent for a specially tailored senior post), followed by the exit of Crown senior vice-president and publisher Molly Stern, despite the pair’s fine track records and the work each had put into the biggest book of the year, Michelle Obama’s Becoming.

Quiet internal shuffling ensued, then the next big wave hit on the final Friday in January, with the sudden closing of 14-year-old Spiegel & Grau. It was goodbye to founders Cindy Spiegel and Julie Grau, adroit publishers of both commercial and culturally significant works—from Michael Diamond and Adam Horovitz’s Beastie Boys Book to Ta-Nehisi Coates’ Between the World and Me. S&G titles were absorbed into the Random House, Dial Press and One World imprints under RH editor-in-chief Susan Kamil. (Author Coates had already migrated to One World when his S&G editor, Chris Jackson, took charge there.) It’s unlikely that this will be the last of the restructuring.

PRH, so much bigger than competitors in the Big Five, leads in sheer numbers, tech know-how, warehouse and distribution efficiency, but has had flatter results than some. It operates on a scale of head-spinning opportunities and challenges, as the repeated restructurings attest. In memos, Dohle has pointed to McIntosh’s “sharp intellect” and “decisive leadership”, and her reputation is for keeping a cool, controlled head—“calm” is the first word she chooses when asked for three to describe herself—but it’s all maintained from a very hot seat.

She spared an hour to sit down with a visitor from The Bookseller on a recent Friday. (Full disclosure: that visitor is under contract to the Random House imprint for a biography of RH’s co-founder). McIntosh is gracious, but it’s also clear we’re meeting at the end of a long week. Beyond the books, computer and family photos in the room, a window offers towers, sky, a sliver of the Hudson: a West Side view for a woman who emphasises that she’s lived longer in New York than anywhere. Yet despite Brooklyn-born thriller-writer husband Chris Pavone, 14-year-old native New Yorker twin sons and a Greenwich Village home complete with labradoodle, McIntosh’s roots lie elsewhere.

Making the grade

She was born to an art-historian father from Baltimore who administered museum and restoration projects, and to a mother who briefly worked in that field, but was also a Pittsburgh débutante and alum of Miss Porter’s School (Jacqueline Kennedy Onassis’ alma mater). While her first-born went through primary school, McIntosh’s mother stayed home, then got an MBA at night and became a banker. Both parents are “great readers”. She grew up with a younger brother in St Paul, Minnesota and Pittsburgh, and took her degree in Cambridge, Massachusetts, at her father’s alma mater: Harvard. He thought she should study law, but she studied fine arts instead. Having “no appetite” for a doctorate, she considered writing for art magazines—today, she takes great pride in composing lengthy, often chatty memos to staff—but ended up attending the Radcliffe Publishing Course.

The second adjective McIntosh uses about herself is “curious”, and curious she was about both kinds of publishing covered by the course—books and magazines. She decided that the direction of her future career would be determined by the branch that offered the best first job.

Which brings us to a word she doesn’t use, but surely applies: lucky. E B White famously wrote that no one should come to live in New York City “unless he [or she] is willing to be lucky”. McIntosh had the curiosity that draws people in and binds them to the city, as well as the ambition, determination and steel to survive. Willing to be lucky, she also willed luck to her. She got a temp job as an assistant to Aaron Asher, who had his own imprint at HarperCollins. Soon serendipity brought a call about an opening at Norton, working for editor Gerald Howard. (Howard later left Norton to become a long-time executive editor and vice-president at Doubleday; now she’s effectively his ultimate boss.)

That “very particular experience of working for Gerry, an extraordinary editor” showed her that “being so immersively committed to a single project” for a very long time, as editors must, wasn’t the right thing for someone also interested in “marketing, sales, being involved in the whole picture”. One Sunday at that well-known metaphysical hangout the laundromat, she read an article on Bill Gates, and “a lightbulb went on”. Intrigued by how technology might transform media, she spoke to Howard, who encouraged her to work on a few tech-related projects in-house.

The early digital age

Wanting more, in 1994 she jumped to Bertelsmann’s Bantam Doubleday Dell (BDD), hired as lowest on the totem pole in a three-person new media department. Work focused on converting books like The Diary of Anne Frank to CD-ROM, and figuring out how to develop something called a website. Amazon was just starting, and Barnes & Noble had begun to show interest.

One morning, McIntosh went to talk to Don Weisberg, in charge of BDD sales. By evening, he had transferred her to his department, with a goal to create an online sales function. For the young woman who wanted to know “the whole picture”, sales held the key: “It’s the nerve centre, connecting to everything going on in a publishing company,” McIntosh asserts.

Besides “calm” and “curious,” she also describes herself another way: as being “a good listener”. She listened to and watched Weisberg very carefully, and regards him as her mentor, the person who more than anyone taught her the business. After Bertelsmann bought Random House and merged it with BDD, Weisberg soon “took a leap of faith”, promoting McIntosh to head adult sales for Bantam, Doubleday, Dell, and Ballantine. A few years later, he put her in charge of adult sales for all of Random House.

She loved sales, but after seven years, the tech bug bit again with the early emergence of digital media, and in 2005 she was named publisher of Random House Audio. “Everything we learned about what digital does to the business model—having to look afresh at retail, author compensation, consumer pricing—first happened with audio,” McIntosh recalls.

Kindled spirits

It would be a little while before the same transformation occurred with e-books, but she had tuned in early. Yet Random House, under then-c.e.o. Peter Olson, wasn’t so set on being a pioneer. Wanting to be at the forefront, McIntosh got in touch with Amazon. It was 2008, and the Kindle was about to cross the Atlantic. Amazon hired her to be director of Kindle Content Acquisition, based in Luxembourg, with a mandate to get e-books on the map in Europe. Husband Chris, having worked as an editor at Crown’s Clarkson Potter imprint for many years, had recently become a ghostwriter. The family’s adjustment—the twins were four years old—fell to him, while McIntosh worked the long hours Amazon expected.

Pavone’s first year as an expat house-husband—who arrived knowing no one, with expat wives his unlikely companions—was “hard” and “didn’t work,” he told the New York Times in a 2014 interview. He found his footing eventually by writing a novel about one such wife, imagining her carrying on a secret double life as a spy. That self-same Molly Stern—so recently departed from Crown—had only just come aboard when she bought the book on a pre-empt. Published in 2012, it won an Edgar Award and sold almost 200,000 copies. Since then, Crown has published two more Pavone thrillers, The Accident and The Travelers, and is bringing out a fourth this May, The Paris Diversion, a sequel to his first book.

There’s an irony in McIntosh having signed off on the exit of Pavone’s publisher (his editor remains at Crown), but she explains: “We very carefully keep things church and state. I’m not involved in decisions around his publications. At home, I’m the author’s supportive spouse.”

For her part, she had a very good experience at Amazon, a company with a future that was beginning to seem boundless. “It would have made a lot of sense” to stay, McIntosh admits—though not long-term in Luxembourg. As luck would have it, after less than two years, New York beckoned, in the form of a transplanted German. Her last week at Random House in 2008 had coincided with Markus Dohle’s first week as the company’s c.e.o. They had met, albeit briefly, before she crossed the Atlantic. While McIntosh negotiated with publishers on how to work with Amazon “and not put heads in the sand,” Dohle  [pictured right] made a point of being regularly in touch. Their conversations were positive: he was intent on making RH a digital leader.

He also had a vacancy to fill. A few years earlier, Weisberg (who’d risen to chief operating officer) had left to become president of Penguin Young Readers (he’s now president of Macmillan US). RH missed the kind of focused yet wide-ranging sales expertise Weisberg had brought. McIntosh could fill both tech and sales roles, and Dohle set his sights on luring her back.

He proved “very persuasive”. Well aware of the scope of the job, the myriad challenges that digital posed for publishers, and the rare credibility she could bring having worked on both sides of the divide, she realised that Amazon “didn’t need” her in quite the way RH did. Besides, she emphasises, “Random House had always been my family”.

Acquiring the right skills

In December 2009, she took up a position created for her, as RH president of sales, operations and digital, bringing to the job an invaluable data discipline absorbed from Amazon. Traditionally, McIntosh observes, publishing has been “a culture of talk and people, opinions and emotions, where debate and discussion drive decisions. Amazon removed the personal and political from decisions, and figured out how to boil them down to math problems.” The stint gave her the analytic and quantitative tools most executives have to obtain through an MBA. It also burnished her confidence.

Two and a half years after her return, Dohle named her RH’s chief operating officer. After the merger with Penguin, she became chief operating officer of PRH. Soon she was given the hands-on experience of running the largest component of the US company, Penguin, before being promoted to her current position, an advancement so rapid that it caught many by surprise.

McIntosh and Dohle’s offices are on the same floor, and she describes the relationship as “very organic”. One week they might speak every day; when he’s travelling, they speak far less. Dohle—born the year before McIntosh—is a man of prodigious energy; he continues to oversee finance, mergers and acquisitions, global communications, corporate development, human resources and legal. All international PRH company c.e.o.s report to him, as do sister companies Verlagsgruppe Random House (in Germany) and Grupo Companhia das Letras (in Brazil).

Looking abroad, McIntosh describes the relationship between PRH US and its UK counterpart, headed by Tom Weldon, as “not formal. We’re great colleagues.” She doesn’t foresee changes in how they work together publishing-wise, or how they will compete on export sales if Brexit occurs.

One of the major industry opportunities that she points to, not surprisingly, is “explosive growth” in audio. PRH expanded its number of new audio releases to 1,400-plus last year, and continuously markets its 13,000-title backlist. It’s also experiment- ing with ways to use smart speakers to create new products and ensure that books surface easily in voice searches. The early tech maven comes to the fore once again.

Asked to identify major industry challenges, she points to the recent holiday season and the problems experienced by many US houses coping with inadequate printing capacity, exacerbated by several major printers merging or going out of business. “While publishers understood that consumers remain attracted to physical books, printers didn’t. We’ve made massive investments in physical supply chain. We need printers to make the same kinds of investments,” she emphasises.

Competing for consumer attention against the news cycle and the great surge in streaming video is another issue, “making it really hard for publicity to break through”. There’s also the flip side: the challenge of unpredictable demand, which can suddenly surge on the basis of a single tweet. Retailers share those challenges.

Much has been made of authors’ declining income and increased workload, and having to be their own social media advocates. At a panel in New York, McIntosh recently acknowledged publishers “feel bad” about the extra work, but don’t see an alternative. She notes that according to PRH data from the past 10 years, “on average, for all PRH authors, earned royalties are holding steady, and there has been a slight uptick in average advances. In some categories, earned royalties have risen along with sales increases.” Of course, individual figures vary vastly.

McIntosh didn’t want to discuss the Crown/RH restructuring in detail. She did say “the coming together was driven by evolution. We looked at where, in the adult space, there is potential for growth.” RH imprints have always been leaders in fiction, but as McIntosh points out, now most of the growth is coming from non-fiction, where, with the exception of certain categories such as memoir and history, RH has not been as active recently.

Crown, founded in the 1930s, sprang from a remainder business and grew to have multiple imprints and a commercial reputation. RH acquired it in 1988, but ran it as a separate unit. Under Mavjee the division was transformed, financially and brand-wise, involving plenty of non-fiction—in that field Crown has what McIntosh calls “the essential seeds” in categories such as business, lifestyle, wellness and self-help. Under the control of RH, she will expect these to grow. The fact that over two decades Gina Centrello had strategically assembled a division that included Ballantine, Bantam, Dell, RH, Dial, S&G and One World must have factored, despite Mavjee’s impressive turnaround, into Crown moving under Centrello’s purview.

The coming years will present the externally generated challenges and opportunities that McIntosh mentioned, and internal challenges generated by the nature of the massive organisation she runs. Two big companies, enlarged over many years, joined into one huge entity. They did so partly in response to changes around them—the rise of online giants fashioning a new world at warp speed and, in the case of Penguin, Pearson’s own problems of size. Having many division and imprint heads can be very expensive.

It’s in the nature of corporate entities to grow and then to digest—to pool, scale, streamline, shed—in order to survive. All the while the world around them keeps changing.

Madeline McIntosh, the woman who wanted to know “the whole picture”, now finds herself determining it at the largest publisher in the US. Choices have to be made about structures—and people. Calm, curious, a good listener, but also someone who believes in the efficacy of removing the human and political and boiling decisions down to math problems: she’s using the toolset that she’s accrued to make them.

Of course, a little luck always helps.