What's behind the grumbling at Rodale?January 19, 2012: 11:23 AM ET
The independent publisher has quietly suffered a stinging series of departures over the past year. It says it is simply feeling the same pressure as other publishers. Ex-staffers blame CEO Maria Rodale's management.
By Daniel Roberts, reporter
FORTUNE -- Rodale Inc., the independent publisher of lifestyle magazines Men's Health and Runner's World as well as books ranging from the South Beach Diet to Howard Schultz's Onward, has quietly suffered a stinging series of high-level departures. The reason, sources say, is frustration with CEO Maria Rodale, who took over in September 2009.
The number of goodbyes grew last week with the resignation of Michelle Meyercord, senior vice president of international operations, and James Kreckler, a vice president who ran the company's digital ad sales. Meyercord had recently been promoted to head of strategy and "grew into Maria's right-hand person," according to one former employee, who describes the departure as "a tipping point for the company." Neither Meyercord nor Kreckler responded to requests for comment.
Those departures are the latest in a long, slow exodus. A spokesperson for Rodale confirmed that the following people left or were fired in 2011: chief information officer Ken Citron; Jack Essig, publisher of Men's Health; Andrew Livingston, director of consumer engagement; David Marchi, senior vice president of global marketing; chief marketing officer Gregg Michaelson; Mary Murcko, executive vice president and group publisher; Karen Rinaldi, executive vice president and books publisher; Bill Stump, senior vice president and editorial director; and Valerie Valente, a vice president in custom publishing. Rodale.com general manager David Kang, communications executive vice president Robin Shallow and executive vice president and group publisher MaryAnn Bekkedahl also left after Rodale became CEO. All but Stump were based in New York City, rather than Rodale's Emmaus, Pennsylvania headquarters.
Why the executive flight? Certainly, the last few years have been bruising for most publishers. But even in a difficult climate, the number of high-profile departures at Rodale is unusual. Current and former Rodale employees, who spoke with Fortune on condition of anonymity, describe a workforce that has become disillusioned with its leadership.
In an era where family control of once-lucrative publishing empires has come under pressure, Rodale has managed to remain the largest independent book publisher in the country. It also produces some of the best-known health and wellness titles on newsstands. Founded in 1930, the eponymous firm is still owned and controlled by the Rodale family. Of the six-person board of directors, four are Rodales including Maria as well as siblings Anthony, Heather and Heidi. Maria Rodale, 49, joined the board in 1991 and was elected chairman in 2007. The only CEO in the company's history to come from outside the family was Steve Murphy, who left in 2009 to run Christie's.
Former staffers point to Murphy's departure as the beginning of the turmoil. Maria Rodale, at that time the editor of Organic Gardening, took the company's top job, which chafed some staffers. "That was the mistake," says one former employee, "not seeking someone new to run the company in a tough time." This person adds that the new boss's "heart-warming and folksy" memos would leave people "shaking their heads" and that her public blog, Maria's Farm Country Kitchen, became a source of ridicule among the staff. Employees started joking about the dire atmosphere, calling the company "Rodead."
Besides Rodale's management style, some questioned the leadership team she began building. In July, she promoted Dave Zinczenko, editor of Men's Health and editorial director of Women's Health, to the status of an editorial director overseeing Organic Gardening and Prevention (whose editors now report to him) as well as a general manager. David Willey, editor of Runner's World, was also made a general manager.
There were also sharp differences in atmosphere between the company's Pennsylvania headquarters and its New York City outpost. Unlike other publishers, Rodale has one foot in an idyllic, small American town and the other in a glitzy, fast-moving media capital. "The entire eighth floor executive wing in New York is decimated," says a former New York City staffer. "The Emmaus folks need to take a field trip to New York to see how everything really looks."
Current management sees the beginnings of a turnaround. "If Rodale were a publicly traded company, I'd be telling my broker to plow everything I have into it," says Zinczenko enthusiastically. The company, he argues, has become more transparent and efficient under Rodale's leadership. It has made strides in improving the profitability of its book business overall. And the 62-year-old health mag Prevention is now modeled more closely on the profitable Men's Health. The days of mega-hits like 2003's South Beach Diet are not behind the company, Zinczenko says.
Rodale, meanwhile, pegs the changes to the turmoil in media. "When I became CEO two years ago, it was clear that we needed to shift our focus more to our customers," she said in a prepared statement. The long-term changes, Rodale argues, have less to do with tumult inside the company than a change in direction. "I took my time evaluating the team and giving people the opportunity to get on board with my new direction. We did see departures, both voluntary and involuntary, as I introduced the new vision, but this kind of change is to be expected when a company sets a different course," she added.
Analysts aren't so sure. "[Rodale] always did nicely but since 2009 has had a lot of problems," observed Steve Cohn, who is Editor-in-chief of Media Industry Newsletter and has followed the company for 25 years. Cohn sees in Rodale's turmoil the financial strains plaguing most publishers. The company, he says, has been downsizing in one way or another since 2009 and consolidating power with a few top editors. But more than control may be at stake. "Putting Maria at CEO was a real cost-saver because I bet they don't have to pay her seven-figures. I think they're now counting their nickels and dimes."
According to 2011 year-end numbers from Kantar Media, a media research firm, Rodale's advertising revenues were down from 2010 and also slightly underperformed the industry. The firm's national equivalent pages — a key industry measurement of all the print ads that run in all the editions of a publication — were down about 7% overall. By comparison, the industry average was down 3.1%.
In a January 13 internal memo about Meyercord's resignation, Rodale wrote, "While it is sad to say goodbye to people who move on to other opportunities, the ability to provide opportunities for growth and advancement from within is very rewarding." The success of Rodale's titles in the next few months of 2012 will prove whether this staffing shakeup was ill-conceived or prescient.