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Major Changes in RD Structure
Jim Milliot -- 8/3/98
Shareholders and analysts who had been clamoring for major changes at Reader's Digest finally got their wish last week when the company's new chairman, Thomas O. Ryder, announced a sweeping "redesign" of RD's corporate structure, as well as a number of personnel changes.
The restructuring will result in RD being organized into four business groups and will also mean major changes in the publisher's corporate reporting structure. The changes are intended to broaden the customer base of RD to include younger customers and more products for older customers, overhaul the company's work processes and cost structure, and free dollars from underperforming assets to invest in growth opportunities, including acquisitions, Ryder said in a letter to employees.
The new business units are the Global Books and Home Entertainment Group, the U.S. Magazine Publishing Group, the International Magazine Publishing Group and QSP Inc. John Bohane has been named senior v-p and president, Global Books and Home Entertainment. Bohane, who will report to Ryder, will be responsible for all BHE product in the U.S. and internationally. The BHE group itself will comprise four strategic business units in the U.S. and three geographic units abroad. Ryder expects the changes to result in greater use of RD's global scale and talent in product development and purchasing.
Within BHE, Iain Parsons has been named v-p and global editor-in-chief of general books and will have responsibility for product quality and costs. David Palmer has been appointed v-p and editor-in-chief of general books in the U.S. Both Parsons and Palmer will report to Bohane. In another appointment that affects the book group, Christopher Willcox, senior v-p and Reader's Digest editor-in-chief, will assume global editorial responsibility for both Reader's Digest and Select Editions (formerly Condensed Books).
Among the new executives joining RD are Elizabeth Chambers, who will start at the company this month in the new position of v-p of business redesign. She had been with McKinsey &Co. In addition, Gary Rich joined the company today, August 3, as senior v-p of human resources, public relations and facilities, while Steven Morello will start at the company later this month as v-p of public relations. Several current executives have been given different duties, including Thomas Gardner, who is now senior v-p of business planning and development. Gardner will be in charge of the Vision Team, which will be responsible for creating a picture of what RD will become. Leaving the company are Marcia Lefkowitz, senior v-p and president of RD USA, and Richard Garvey, senior v-p of corporate planning and new business development.
Ryder said details about RD's targets for restructuring costs and raising capital will be released in mid-September.
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