Seventy-Five Years of Norton's 'Books That Live'
Gayle Feldman -- 6/29/98
W.W. Norton is a publishing house seriously out of step with the times. By most norms of the book business of the late 1990s, it shouldn't exist at all.
The company is celebrating its 75th anniversary and yet has never been merged or acquired. It's the kind of medium-sized company once highly typical and now very rare. It takes in more than $100 million in annual revenues, yet its stockholders double as employees.
In 1975, Norton, with its quiet demeanor and reputation for "serious" books, was the unlikely house that brought out Shirley MacLaine's You Can Get There from Here. Norton got there, all right, but it was a long way from the "here" of its 1923 beginning, when W. Warder Norton and his wife started to publish Cooper Union lectures in pamphlet form pro bono as the "People's Institute Publishing Company." How did it get to the "there" of 1998, trailing an unbroken string of more than 40 years of profitability (the last two record-breaking), when so many others have fallen by the wayside?
When PW put that question to Donald S. Lamm, the fourth chairman in Norton's history, who joined as a college sales rep in 1956 and ran the company as president from 1976 to 1994, his answer was deceptively simple: "Balance and stability are what make Norton different."
A Delicate Balance
The balance derives from a careful mix of trade and college publishing; the stability from Norton's employee ownership structure and the loyalty it promotes. While the growth patterns of other companies have produced wrenching cultural changes that have left most of them severed from their roots, Norton's strength lies in its very self-conscious rootedness.
The kinds of books with which Warder Norton began are still being successfully published by the company today. He set out to mine the riches of European and American science and social science for books of lasting value, "Books That Live," as his motto put it.
During his first decade in business, these included Bertrand Russell's Philosophy, Franz Boas's Anthropology and Modern Life and titles by John Dewey and Max Planck. Their descendants are titles like Steven Pinker's How the Mind Works and Jared Diamond's Pulitzer Prize-winning Guns, Germs, and Steel.
Seven years after he decided to get into the business, Norton made another decision that would be crucial to the life of his firm. The opportunity arose to buy the college list that Alfred Knopf had started and then sold to F.S. Crofts. Norton took it on and set the future course for his company, whose books became standard-bearers in several academic disciplines. In the decades that followed, the relatively predictable financial patterns of textbooks enabled the company to ride out the much-less-predictable ebb and flow of the trade.
The music list would eventually dominate college music courses with authors such as Paul Henry Lang, Joseph Machlis and Donald Grout. The nascent psychiatry list paved the way for Norton to publish Karen Horney, Erik Erikson and Rollo May, and be the principal American publisher of Sigmund Freud. Later, the firm published such classics as Edith Hamilton's The Greek Way and The Roman Way, and in the 1950s conceived its first Norton anthologies, those staples of English literature courses that have gone on to sell more than 20 million copies overall.
Unlike many others, Norton has never constructed walls between its text and trade book divisions, although in the past, the trade has sometimes felt overshadowed a bit by the financial muscle of the texts, but free-flowing communication between the two divisions has been a constant. As W. Drake McFeely, who succeeded Lamm as president in 1994 (and, like his predecessor, came from the college division), put it, "I don't think any publisher in the U.S. can handle the crossover trade/college book as well as we do."
While Norton didn't have the celebrity connections and splashy bestsellers of Bennett Cerf's Random House or the mass-popularizing instincts of Richard Simon and Max Schuster, he nevertheless dreamed up the ideas for several major bestsellers. One title, Mathematics for the Millions by Lancelot Hogben, sold more than 250,000 copies in hardcover and remains in print as a Norton paperback. In a 1934 article, PW was prescient about one of Norton's defining characteristics: "While Norton has perhaps had fewer bestsellers than a number of other firms, those they have had have had a peculiar virtue of permanency."
Ensuring Stability
Perhaps the greatest turning point for any private company arises when its founder decides to sell or dies. Just after the end of the Second World War, Warder Norton died unexpectedly at the young age of 54. It was his widow, who from the beginning had been an active partner in the company, who negotiated a transition unique in publishing, a philosophy that shapes the firm's future even today. She offered almost all her stock to the leading editors and managers in a Joint Stockholders Agreement that entrusted ownership of the company to its employees.
Storer Lunt, who had been v-p for sales, became president, to be succeeded in 1957 by George Brockway, whose first love was trade books, though he also published the first Norton anthologies. During his watch as president, the trade department brought out Betty Friedan's The Feminine Mystique, Dean Acheson's Present at the Creation, Joseph Lash's Eleanor and Franklin, Eugene Burdick and William Lederer's The Ugly American and Vincent Bugliosi's Helter Skelter. The p try program that has brought names like Adrienne Rich, Rita Dove, A.R. Ammons and Stanley Kunitz to the list also got its start during this period.
How Employee Ownership Works
Most publishing folk who work within very different structures want to know how Norton's ownership mechanism really works. To begin with, there are two kinds of stock -- voting and non-voting -- and the latter is very widely spread. At present, according to McFeely, "half of Norton's 400 employees are stockholders." An employee is entitled to buy stock after working for the firm for three and a half years. There is, however, a limit on the amount any individual can own: "Well less than a fifth of the voting stock," according to Lamm.
On purchasing stock, employees agree to sell it back upon retirement, not death. McFeely emphasizes, "The key thing is that the stock is in the hands of active members of staff." As a result, there have been no lurching transitions at Norton. A couple of years ago, Don Lamm had the single largest block of shares. But there's an unwritten rule that when a director reaches 65, he or she should begin planning to leave, and at age 67, Lamm has become much less active in the day-to-day life of the firm. A great deal of his stock has consequently changed hands.
Fifty to sixty percent of shares are controlled by Norton's 14 directors, who include vice-chairman Edwin Barber, editor-in-chief Starling Lawrence, publishing director Jeannie Luciano, sales director William Rusin, production director James Mairs, college department director Roby Harrington, and college editors Julia Reidhead and Steven Forman.
Both Lamm and McFeely acknowledge that over the years there has been no shortage of calls from foreign companies, investment bankers and other publishers inquiring if the company was for sale. But McFeely said the directors "know we get to call our shots every day, and that's more important than the financial gain from selling out."
Gerald Howard, who in May traded his v-p and senior editor's job at Norton to become editor-in-chief of trade paperbacks at Doubleday, described what employee ownership entails on a day-to-day basis. He recalled, "I heard on more than a few occasions an editor use the phrase, `I'd like to spend some of your money' in an editorial meeting. That breeds fellow feeling and a certain caution. You don't want to make the big mistake that will hurt your fellow shareholders. Norton is just not so prone to the fevers that beset almost all other publishers in the matter of overspending."
Matters of money was never discussed with the outside. Now, McFeely said, "I don't see any reason to cover up the fact that our revenues are above $100 million." Star Lawrence also d sn't mind the world knowing that he recently paid $1 million -- Norton's highest-ever advance -- for a new book about Silicon Valley from Michael Lewis, who left Norton after the bestselling success of his first book, Liar's Poker. Lewis decided to return to the fold for the new book, despite having been offered more money elsewhere.
Back To News
---> |
