Rodale's New Attitude

Folio: The Magazine for Magazine Management, Nov, 2000 by Michael Kaplan

PRESIDENT STEVEN MURPHY AND VICE CHAIRMAN MARIA RODALE BELIEVE THE COMPANY HAS TO BE OVERHAULED. AND THAT'S GOT A LOT OF OLD RODALE HANDS WORRIED THAT SOMETHING INVALUABLE IS BEING LOST FOREVER.

RODALE ONCE WAS A MAGAZINE-PUBLISHING ANOMALY. IN AN industry that has become increasingly corporate and cutthroat, Emmaus, Pennsylvania-based Rodale Inc. was a place where employees routinely stayed for decades. Salaries may have paled alongside those at the Conde Nasts of the world, but the cost of living in Emmaus is a lot less than in Manhattan--and those employed by Rodale historically showed little interest in leaving. This gave the company a kind of stability that even the most skyscraping contracts couldn't buy.

Not anymore. Rodale--which publishes 11 consumer titles and generates about $500 million in its magazine and book businesses--is a changed company, and the agent of change is primarily Steven Murphy, the company president who succeeded Bob Teufel in that role in April.

And therein lies a story. While it is too early to say definitively what Murphy's impact will be on the company's powerful brands--titles like Men's Health, which is responsible for a third of the magazine division's revenue, and Prevention, the 50-year-old publication enjoying its best year ever--Rodale has clearly become a very different company from what it was a year ago. And just as clearly, a lot of people are unhappy with the changes. That, apparently, is the price of being an industry icon.

Start with turnover. Rodale may not have the highest employee turnover rate in the business, but over the last year it has had one of publishing's lengthiest strings of high-profile departures. The list includes the president of the company, the heads of both major divisions--books and magazines--and the publishers and top editors of both Men's Health and Prevention (see chart, below right). "It's nice to have a Men's Health," says one company insider. "But you need a Mike Lafavore [the founding editor of that title, who left in late 1999]. And they're all gone now.

Beyond turnover, Rodale is changing dramatically in ways that go far beyond the come-and-go of a hot job market. Murphy, a former executive of Walt Disney Co., restructured Rodale last month, creating five new operating units that align the company's assets--books and magazines--around their core subjects: Men's Health, Women's Health, Sports and Fitness, Organic Living, and Books. In the process, he promoted several executives from within and brought in several from outside the company. The move, Murphy says, will transform Rodale. "That means getting out of the structure of being defined by format," he says. "What's our content? And who's our customer? The creative teams need to access their audience with any format available. This transforms Rodale from a publishing company organized by format into a media company organized by content and customer."

The move, Murphy adds, positions Rodale for the rapid growth he says is part of his mandate. Realignment was needed, at least in part, he says, because the whole business was declining: "The company was troubled," he says. "It had lost its way a bit. The profits were not as high. There had been some big mistakes. These last four or five months we have done extremely well," he adds.

The company may have been troubled, some Rodale watchers say, but Murphy is not the person to fix it. "You're watching a company go over a cliff," says one observer. "There is nothing I can say that is good."

Nonetheless, ad revenues for those Rodale titles tracked by PIB are up substantially this year, after subtracting New Woman from 1999's total.

Rodale was founded in 1930 by J.I. Rodale, who ran the family business with an attentive, hands-on touch, producing magazines like Prevention and Organic Gardening that jibed nicely with his personal philosophies of health and fitness. Following J.I.'s death, his son Bob oversaw the company in a similar style. Cashing in on the late-century fitness craze, he launched titles like Bicycling, Backpacker and, most successful of all, Men's Health. Ten years ago Bob Rodale was in Moscow setting up a Soviet edition of New Farmer when he died in a car crash.

Although his death was shattering to the company, the feeling was that Rodale Press would soldier on in good hands. While Rodale's wife, Ardath, retained the post of chairman and CEO, Teufel, Robert Rodale's number-two since 1978, took over more of the day-to-day operations and was said to have run the company with precisely the same kind of sensitivity and stability J.I. and Bob Rodale had employed.

"Bob Rodale was our moral compass, and he wasn't just some P.R. creation. He was a really special guy," enthuses to Mike Lafavore, who founded Men's Health and left the company a year ago. "Bob Teufel took over the company and managed the place in the spirit of Bob Rodale."

So in spite of turmoil in Rodale's bicycling group (the 1,100-employee company had the first layoffs in its history in that group last year) and the impending failure of New Woman a year ago (the company acquired it from Primedia in 1998 for $15.8 million), it came as something of a surprise when Teufel decided to leave the company early. (Teufel does, however, remain a member of the board.)