The MT Interview: Carolyn McCall

One of the toughest operators to have risen through the Guardian Media Group's ranks, her role as CEO is to shore up its national newspapers as it pushes deeper into online media and broadcasting. But what's it like working with an all-powerful editor-in-chief?

by Andrew Davidson
Last Updated: 09 Oct 2013

The boss of the Guardian has cut her finger on some paper - pesky stuff. 'I'll just be a minute,' says Carolyn McCall, looking for a plaster. Could be worse, I say. Steve Esom had a full-scale nosebleed when I interviewed him as boss of Waitrose. Tissues and blood everywhere. It's the effect I have.

McCall, plastered up, laughs. You can see why so many like her. Aged 46, tall and good-looking, quick to banter after years spent working with journalists, she has an easy, upbeat demeanour that quite lulls you into thinking she's among the smiliest people around. And then she can be blunt. Some even think ruthless.

'Not ruthless but tough,' she says, when I put it to her. 'I think Apax was surprised at how tough we can be about business.'

She smiles at the thought. Apax recently bought half of Trader Media magazines, the most profitable bit of the Guardian Media Group (GMG), which McCall now helms. Apax and GMG have also joined forces to make a bid, apparently for Emap's entire B2B operation, recently put up for sale. Apax paid a stonking sum for Trader Media, valuing the business at over £1.3bn. This gave McCall more than £675m to play with. Whatever will she do with it?

Invest it in something that will help keep the Guardian and Observer afloat, is the short answer. As chief executive of GMG, which also has interests in radio, local newspapers and property services, her job is to bring in the revenues that subsidise a loss-making national newspaper operation. GMG is owned by the Scott Trust, a unique, non-profit-making body that aims to preserve the liberal voice of the national papers and ensure they get the money to operate well.

For that purpose, the Guardian's owners expanded beyond the newspaper as early as 1924, when the Scott family bought the Manchester Evening News, and, later, added stakes in radio, television (since sold) and magazines. It continues to this day, with the newspapers, the business group and the owner (Scott Trust) involved in a delicate daily dance. 'A subtle relationship,' as Guardian editor-in-chief Alan Rusbridger puts it, 'that outsiders often don't understand.'

And that makes heading GMG a complex task. Last year, the group made a pre-tax profit of £98m on a turnover of £716m - but how much profit does it need to make? How much should it reinvest in the Guardian and Observer, which made a loss of £16m last year, and how much in the supporting businesses? Should it run the newspapers with the same efficiency as it runs other subsidiaries?

And what power does the editor of the Guardian wield over this, in an organisation whose whole purpose is to give him money to spend? The Guardian relaunched two years ago in smaller 'Berliner' format. Its rivals will tell you that the paper's slackening sales figures (average 367,000 daily) show the revamp was a failure, and in a properly commercial business, heads would have rolled. Rubbish, says the Guardian. Sales are not dropping as fast as rivals', all newspaper sales are in long-term decline, and look at the success of its Guardian Unlimited website and what that bodes for the future...

In short, GMG is not like any other media business around - unless you listen to McCall, who says plainly that I'm wrong and that it is just like any other business. It's run efficiently, it has to make money and it reports to an owner - in this case not a proprietor or a bunch of shareholders but the aforementioned trust.

This has rankled with competitors, who believe GMG is closer to public than private sector in culture. Jobs for life, cosy cliques, little incentive for better performance - all, of course, overseen by sandal-wearing, muesli-eating, not-for-profit liberals of stereotypical legend.

McCall, only child of a globe-trotting multinational boss, is having none of it. 'I laugh when people say we aren't commercial,' she retorts. She adds that one rival who made the accusation offered her a job. 'If we're so uncommercial,' she says, widening her eyes, 'why would they want me as commercial director?'

The answer is that many rate her as the toughest operator to have sprung from GMG in a long time. That much was plain within months of her appointment to the top slot, when she passed over the internal candidate for the job of MD of the Guardian and Observer newspapers - her old job - and brought in Emap's Tim Brooks. In GMG, these jobs had always gone to internal promotions. Many in the media world were stunned: GMG's commercial director Stuart Taylor, who was expected to get the post, was popular and respected.

'I think Stuart felt absolutely betrayed,' says a media veteran. 'Anyone else from the Guardian would have just promoted internally.' But McCall, adds the gossip, needed to put down a marker. She is backed by the GMG chairman, Paul Myners, who used to chair M&S and wants a harder-edged approach to decision-making inside the group. 'Now,' says the same source, 'everyone knows Carolyn's going to be tough.'

Well, sitting in an Armani suit in her modest office in a converted block opposite the Guardian newspaper's base in London's Farringdon Road, McCall doesn't seem capable of upsetting anyone. She's too amenable. She laughs, she smiles, she glides around, organising water and tea. Sunlight falls on the floriferous orchid atop a shelf. Papers are stacked in military squares on her desk. Reflecting her tidy equanimity? 'No, I just tidied up for you!' she giggles.

So did she feel the shudder caused by the Brooks appointment?

'Look, I wasn't making a statement,' she says, switching to serious mode. 'I was giving it to the best guy for the job. I had developed Stuart and worked with him closely and he's now going to be commercial director of GMG radio, and for me it's about the right people for the job.'

And McCall knows what GMG needs. She came up on the sales side of the Guardian newspaper and knows the organisation, its culture and its long-staying staff intimately. She was a protegee of Caroline Marland, the former classified boss who became Guardian managing director and re-energised the paper's finances with a focus on media and public-sector job ads.

Both women have a smiley, unconfrontational approach, happier to rule by charm than by fear. 'They have a winning way of taking you into their confidence,' says Rusbridger, 'and telling you things you don't expect.' Indeed, for years, some outside the organisation found it difficult to tell Marland and McCall apart - both tall, bobbed, striking, friendly and flirty.

But McCall has proved the more ambitious - advancing one step higher than her mentor, to become chief executive of the whole group - and has now developed her own chummy style. She's close to journalists, who like her irreverent humour and the fact that she is an interested reader. She also has three young children, a working husband and a home outside London that she drives to and from every day. She makes no compromises, because she's committed to the unique way that the Guardian group operates.

'I really wanted this job,' she says bluntly.

Will she be different from Bob Phillis, her predecessor as GMG chief executive, who was a generation older and came from a BBC and ITN background? 'What do you think, Andrew?' she says. Frankly, I don't know. 'Ask around.'

And different to Marland? 'I am more interested in business: I like financial data and balance sheets. And remember, Caroline didn't do this job.' Right.

Others say McCall will be more intuitive and more popular than Phillis, and have a better feel for new media than either Phillis or Marland.

McCall is equally blunt that she would have left GMG if she hadn't got the top job. Now she has it, she's developing a strategy that she hopes will give the national newspapers a firmer footing, and spread the group's interests. Her problem is that each of the group's five main arms - Guardian News and Media, GMG Regional Media, Trader Media, GMG Radio and GMG Property Services - needs investment to thrive. Hence the decision to sell off half its most profitable division, Trader Media, to private equity and free up some cash.

That will fund more innovation across GMG as it moves next year to a new purpose-built digital newsroom and offices at King's Cross, just a mile down the road. 'I think we have been innovative in regional media, and backing Channel N (GMG's local TV offshoot of the Manchester Evening News) gives us an interesting multimedia strategy. Restructuring has let us do that,' says McCall. 'We've also got 13 radio stations (including Century FM, Smooth and Real Radio), and that will become more. I think there will be only two or three major radio groups in five years' time, and yes, we are in the market to buy more. We've got the money to spend.'

Hence the joint bid with Apax for the Emap B2B division, although changing market conditions could make Emap a less willing seller. But not all of that money will be spent on media. 'Our strategy is to bank some of it, and keep it far away from UK media. We are looking at all opportunities, but we are not likely to invest in the kind of assets we have already got, with the exception of radio. We won't buy print media, but we may buy websites.

'And because we are not a listed company we can take time, and get it right,' she adds. 'It's got to be the right deal with the right management or the right partners. We have, for instance, the No. 5 property portal, and we are a leading supplier of property services to that market. Our acquisition strategy might be to bulk that.'

The other side of her job is to oversee strategy for the newspapers at the heart of it all. She says both the Guardian and the Observer are doing 'bloody well' at the moment, and starts reeling off statistics, backed by bullish optimism - her ad sales experience has clearly left its mark. 'We got state-of-the-art printing presses three years before anyone else, we have a fantastic digital strategy, which has had enormous investment - and that's only the start. Sometimes I don't think we are investing enough. We have to be on top of what comes next after web 2.0. Great content, great talent - we have got to have really good commercial sense, we have got to monetise it.'

Some foresee friction ahead as the newspapers and online business soak up cash and other bits of GMG are squeezed. But GMG's chairman, Paul Myners, makes it plain he expects McCall to take a tough approach to the newspaper's finances, whatever the profits raised elsewhere in the group. 'The fact that we believe in journalistic excellence doesn't mean we can squander resource,' says Myners. He admits that 'there has been fudging' in the past.

That much is known across the industry. Rivals contend that the Guardian and Observer have had resource poured into them beyond what an ordinary business, with a sensible eye on profit and loss, would have allowed. They also question the power that Rusbridger wields, and contend that few on the GMG board can stand up to him. If they do, he can by-pass them by appealing directly to the Scott Trust. 'Editors can destroy managers in any organisation,' says one executive. But particularly at GMG.

In fact, all newspapers have invested large sums recently to carve out an online and paper-based future, and many newspaper groups have powerful editors-in-chief - Associated's Paul Dacre is another. And McCall brushes aside accusations that neither herself nor Rusbridger has been asked hard questions about the success of the Guardian's Berliner-sized relaunch.

'Look,' she says, cooling the warmth, 'there is no question that if the relaunch had been a failure, not one journalist would have lost their job, but Alan and I would have. No question about it. But it has stabilised our circulation and readership. We put on something like 27% year-on-year colour advertising revenue; our display advertising revenue, when the market was flat or down, went up 6%; and our combined reach of paper and website is 4.4 million a week. We have won every award going... '

Don't get her started. Colleagues say McCall has always had a passionate mastery of her brief. 'Carolyn's unusual in that she's a good manager who people want to follow, but she also isn't scared of the numbers,' says Stephen Grabiner, the ex-Telegraph executive who now heads the media team at Apax, GMG's new partner in Trader Media. He says McCall faces huge challenges in directing the future strategy for GMG, but is better equipped than most because of her experience working her way up the group. 'She's risen to every opportunity, she's clearly ambitious, and she's proven herself each time.'

As for standing up to Rusbridger, McCall points out that they have a successful partnership that has been forged in projects and relaunches over more than a decade. Between them, they sort things out.

Rusbridger, for his part, says the question is just another example of people misunderstanding the unique way the Scott Trust and GMG interrelate. He points me towards a 1921 essay by former Guardian editor CP Scott that refers to the editor and business manager marching 'hand in hand, the first just an inch or two in advance'. That's why the editor sits on the GMG board and is a Scott Trustee. 'People on the money-making side here know the deal, otherwise they wouldn't have come here,' says Rusbridger. And actually, in 12 years at the top, he's never gone around GMG to appeal directly to the Scott Trust - though he admits he could.

Clearly, this is no usual hierarchy, and matters would swiftly become difficult if the key players fell out. That's why McCall's people skills are so highly valued. Those who do business with her are struck at how she balances warmth and efficiency. 'I adore her,' says Christine Walker, founder of Walker Media and an old friend, 'because at the heart of it, Carolyn would go a mil- lion miles for you. But anyone who thinks there is something cuddly about her is very mistaken.'

That ability to make friends easily yet retain a steely core comes from her upbringing, says McCall. Born an only child in India to British ex-pat parents - Scottish on one side, Irish on the other - she was educated in the Far East till her teens, then sent to a Catholic girls' boarding school in Derbyshire. Her father ran the Far East division of a US textile multinational, her mother worked for the British embassy in India. McCall inherited her mother's organisational skills and impatience, and her father's ambition and calmness. 'I'm organised when I have to be, but at home I am pretty easy-going,' she smiles.

She took her time settling on a media sales career. After attending Kent University, she trained to be a teacher in London. She did a year at Holland Park Comprehensive, then switched to do a masters in politics and took a job as a researcher at Costain, the construction group. Next she tried journalism, and was offered a job on Kevin Kelly's Business magazine, but passed it up - she had a holiday booked - and instead applied to be a research planner at the Guardian. She got the job, and started in 1986.

Marland's team quickly spotted her talent and moved her into sales. 'Caroline gave me my head, I learnt how to present, how to be on my feet. The most important thing was that I learnt negotiation, and I learnt about people - I am very interested in them, how they handle different situations, how you handle people in teams.'

By 1995 she was advertising director of Guardian Newspapers; managing director (2000) and CEO (2004) followed. There have been ups and downs. The Guardian's British joint venture with American magazine Wired - overseen by McCall on the ad side - closed, but not before she had been offered a job by the San Francisco-based partner. And merging the Observer operation with the Guardian was hard. 'We had a sequence of editors before Roger Alton came along. That was very difficult.'

The ups include the launch of Guardian Online in 1996 and Guardian Unlimited later, and the brave decision to relaunch the newspaper in Berliner, rather than tabloid, format. 'Alan and I spent weeks going round explaining the decision; it took six months, it was a tricky time.'

And throughout, she has turned down offers to move elsewhere - from Channel 4 and News International, among others. Would she have left if she'd missed the GMG chief executive slot? 'Yes,' she says, 'I'd have started up my own business, something around people and organisational development. But maybe for me that would have been too early. You know, I love the deals, the people, the media - it made me realise I really wanted this.'

Others wonder if she won't, eventually, be tempted to test herself in a more conventional organisation. She's already on the board of Tesco as a non-exec. That, say friends, must be an eye-opener. 'I would be amazed if Carolyn is still at GMG in two years' time,' says Christine Walker. 'I just don't think GMG is big enough for her.'

McCall makes a face when it's put to her - she's only just got the job she coveted. Why leave somewhere she knows so well? She has the hours she wants, she has care in place for her two children - aged four and six - and her husband gets on with running his cricket promotion business from home. 'If he is abroad, I go into single-mother mode. I've always got a good nanny and a support network and friends.'

So what does she spend her £670,000 salary and bonus package on? 'I don't know,' she says, uneasy. 'I live near Berkhampsted, there's lots of space but you know... I am not at all extravagant. I guess I spend it on holidays. I like going away.'

How much does she spend on clothes? 'I am not telling you that!'

What's she got on? 'What have you got on?' she counters, grinning. It's hard to shift her good humour. Only once does she seem alarmed, when I misinterpret her remarks on branding to mean that she'd like to change the name of the Observer. (Question: Given the success of Guardian Unlimited, why not rebrand the Observer? Answer: 'Well, we might.')

For a second, she looks panic-stricken at what she has said. For a Guardian boss, this is clearly incendiary stuff. So she asks me not to use the remark. Then she wheedles. Then she tries flattery. She gives up and rephrases her answer.

'Given how much money brands take, and how Guardian Unlimited is now established, we have to be more overt about the Observer coming from the Guardian news and media stable. But we're not going to have the Guardian-on-Sunday - the Observer is a strong print brand.'

Then she changes the subject. It makes you realise that GMG bosses must handle their papers more carefully than most. And those who work there wouldn't have it any other way.

FOUR CHALLENGES FACING MCCALL

1. To reshape the Guardian Media Group's portfolio through acquisition and transforming existing businesses - strengthening the group in areas of growth and diversifying its revenue streams

2. To guide GMG's traditional media businesses through the transition to digital in a time of huge disruption in the industry

3. To maintain the independence of the Guardian, and support its ambition to become the world's leading liberal voice

4. To attract and retain the industry's best talent

McCALL IN A MINUTE
1961: Born 13 September in Bangalore, brought up in India and Singapore.
Studied at the University of Kent (BA History and Politics) and
University of London (MA Politics)
1986: Joined the Guardian as a planner in the marketing department
1995: Appointed advertising director of Guardian Newspapers Ltd (GNL)
1999: Launched Guardian Unlimited
2000: Managing director, GNL
2004: Chief executive, GNL
2005: Guardian relaunched in Berliner format
2006: Chief executive, Guardian Media Group
2007: Sale of 49.9% of Trader Media Group to Apax Partners, in a deal
that valued the business at £1.35bn

Tags:
Leadership

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