Twelve months ago Sylvia ('Sly') Bailey arrived at Canary Wharf to take charge of Trinity Mirror, publisher of the struggling Daily Mirror and Sunday Mirror, and Britain's largest publisher of regional newspapers. Her axe, so colleagues said, was sheathed: Bailey would take her time, assess the group's problems and then publish a strategic plan that would set Trinity Mirror back on course.
Since then, she has swept away the senior management team that she inherited, slashed 550 jobs, berated the muddled management style of her predecessors, sold the group's ill-fitting collection of Irish newspapers, but has remained loyal, so far, to Piers Morgan, the celebrity editor of the flagship Daily Mirror.
While media pundits have fretted about her vision, or lack of it, for the national newspapers in the Trinity stable, the stock market has been much kinder. Trinity Mirror's share price has risen steadily during her reign, helped initially by the takeover approaches that heralded her arrival and reinforced over the passing months by the hope that Bailey will be able to rescue Trinity Mirror from the strategic quagmire that has sucked the life out of the company since its inception.
She is, as one shareholder put it, 'the company's last chance to stand on its own feet. If she falters, then it will be carved up and sold off; if she succeeds, it might still be carved up and sold off at a higher price, but it has a chance of survival. The share price reflects the reality: it's balancing the price of swift failure, which would see the company taken over for around 500p a share, with the possibility of resuscitation, which would see a steady market re-rating of the shares.'
Failure may still hover at her shoulder, but Bailey's first year, with its emphasis on short-term action to bolster earnings, improve management and tidy up the portfolio, has bought her time. How much will depend on how prepared she is to use her axe and what the preliminary results look like later this month.
The strategic quagmire, in essence, is quite simple: the group is stuck, despite last year's rises, with a low share price that militates against expansion; its national newspapers are pitched against bigger, and better-funded, rivals; its regionals, while dominant, are harried by the ambitions of upwardly mobile forces such as Gannett and Johnston Press. In short, it can neither expand nor compete, yet it must find a way to break this spiral of decline.
Ostensibly, Trinity Mirror was a logical marriage of a once-vibrant regional newspaper group (Trinity) with a once great national newspaper group (Mirror).
When the two came together five years ago, the deal's supporters hoped that some of Trinity's magic, and particularly its stock market rating, would rub off on Mirror.
Sceptics warned that Trinity's management, which won an acrimonious battle to lead the merged company, would not be able to cope with the pressures of running national newspapers; that they would be easy prey for the hardened newspapermen at News International, publisher of the Sun and News of the World, and at Associated Newspapers, publisher of the Daily Mail. And so it proved, culminating in a disastrous price war by the Mirror against the Sun, which cost the company millions and did nothing to staunch its circulation losses.
The Mirror inherited by Bailey is weaker than ever, its circulation at an all-time low and its identity confused by a chaotic editorial policy in which the paper has veered downmarket, then upmarket, then downmarket again. Its sales, now below 2 million a day, would be even lower had it not been for a series of stunts that have given a temporary boost to sales - such as last year's serialisation of Paul Burrell's revelations about his life as Princess Diana's butler. But the stunts are only brief highs in a chart heading relentlessly south.
The daily's troubles are replicated on Sunday, where two largely indistinguishable, and undistinguished, newspapers scrap for the same readers in a crowded market. In Scotland, the once mighty Daily Record has been humbled by the success of the Scottish Sun and hurt by the Daily Mirror. Bailey's newspapers are under attack from all sides, with Richard Desmond's Daily Star stealing readers at the bottom of the market, the Sun slugging away at the core and the Daily Mail attacking the upper echelons of the Mirror's readership.
Fighting back costs money, but does not guarantee success: all it guarantees is that the opposition will fight even harder and spend even more money.
This is not a scenario that appeals to shareholders. The stark option is to do what Lord Stevens did for years at Express Newspapers: refuse to be drawn into battle, consciously manage a declining circulation, extract as much profit as possible by cutting costs and eventually sell out to an ambitious newspaper proprietor with more money than sense.
The radical option is to strip the national newspaper division down to bare essentials by selling everything apart from the Daily Mirror and Sunday Mirror: that would include the People, the Daily Record and Sunday Mail in Scotland, and the sports division, which publishes the Racing Post - the only bright spot in an otherwise dull seven years. The sales would raise cash, but more importantly would give the group focus. Instead of a dysfunctional collection of newspapers that cannibalise each other's sales, it would have just two national titles to set atop its impressive cash-generating stable of more than 250 regional newspapers.
So far, Bailey has tilted towards the Stevens option, with swingeing job cuts, cost control and a ceasefire on circulation wars. Her strategic review, published last summer, envisaged no disposals beyond the clutch of Northern Irish newspapers that were a hangover from the days of David Montgomery, the former Mirror chief executive who played a role in their acquisition by investment group 3i.
Bailey's supporters made much of her determination to control costs, but it was her frustrated attack on the stewardship of the company by the former management that grabbed the headlines. If her outspokenness was unusual - incoming chief executives are usually more diplomatic, especially when their current chairman was also in charge of the previous regime - so was her appointment.
Bailey made her name, and her considerable reputation, in the magazine world and had only a brief acquaintance with newspapers - first in advertising sales at the Guardian and then in a management role at the newly launched Independent. It was when she left newspapers that her career took off: by 1994 she had, at 31, become the youngest member of the board at IPC, Britain's biggest magazine publisher. On the way, she had picked up the host of essential adjectives that women, in what was then and remains now a man's world, need to garner: Bailey was 'ballsy', 'tough', 'no-nonsense'.
In 1999 she became chief executive at IPC and led the management buy-out of the business from Reed Elsevier for £860 million. Two years later, she played a central role in reselling the business to Time Inc for £1.2 billion.
It was her ability to satisfy the tough demands of City investors as much as her unquestioned ability as a publisher that drew Trinity Mirror to Bailey. Sir Victor Blank, the chairman, knew that his group lacked credibility in the City - he had only to look at his share price - and when Philip Graf, his chief executive, resigned unexpectedly, he was determined that he would replace him with a CEO who would bring that most coveted of all attributes: the City's seal of approval.
Bailey could do that, and more. Relatively young, undoubtedly glamorous and undeniably tough, she was the polar opposite of her two immediate predecessors - Graf, a regional newspaper man, and David Montgomery, the former News of the World and Today editor, who scythed through the Mirror's costs, but failed to achieve any growth before losing out to Graf in the Trinity-Mirror merger.
Bailey immediately gathered some seasoned newspaper hands to her side, appointing former Sun and News of the World general manager Ellis Watson as head of her national titles, with Phil Hall, a former News of the World editor, as her editorial development director. Seasoned they may be, but neither is renowned for innovation. 'It's one thing presiding over market leaders like the Sun and News of the World with the News International machine at your back and Rupert Murdoch watching you like a hawk,' says one former News International executive. 'It's quite another to fight the sort of guerrilla warfare that the Mirror needs on a daily basis if it is to stay ahead.'
Despite the management changes and cost-cutting, Bailey's first year has been a study in anonymity. She has avoided talking to the media, preferring to focus her attention on her shareholders and her company. Her silence has been rewarded by the market with a rising share price - a phenomenon that eluded her predecessors - but she has yet to show whether she has the magic that can lift the group from years of underperformance.
Had it not been for her savage attack on the previous management, Bailey's strategic review of Trinity Mirror would have been met with derision.
While she berated Graf's regime for being 'systematically risk-averse', nothing in her own thinking seemed to hint at risk-taking or even overhaul.
'The degree of integration, sharing of best practice and capture of economies of scale between the businesses remain limited,' she said at the time.
'Barriers to change were not overcome' by the merger management; and 'the nationals suffered from a lack of firm management focus and market understanding... It's clear now that these great brands could have benefited from clear direction and control from the centre. Suffice to say, I would have done it differently', adding that new ideas were allowed to 'wither on the vine' and the approach to structured thinking was 'weaker than I had experienced elsewhere'.
That, though, was the beginning and the end of Bailey's fireworks. Her own ideas - cutting costs, selling peripherals - were neither new nor bold. Her attempts to define the Daily Mirror as a 'seriously fun' newspaper were dismissed as banal. What had been promised as a thorough strategic review that would reinvigorate Trinity Mirror, was in reality a rehashing of old solutions to old problems. It was, said critics, devoid of fresh thinking.
But the market was sated by news of job cuts intended to generate savings of £25 million within three years. 'At least there was some action, even if it was hardly strategic,' says one analyst. 'There had been a real worry that the journalists - in particular Piers Morgan - had grown too powerful under the old management and that cost control had gone out the window. Sly made it clear that someone was in charge, and that someone was her.'
The challenge now, as Bailey enters her second year as chief executive, is to exploit the goodwill that the market has bestowed. She has already delivered precisely what Blank had hoped for: a City reappraisal and a rising share price. With that, the pressures on him and his board have eased, and would-be suitors such as Candover and Apax can be gently spurned.
But to meet that challenge, Bailey and her management team will have to demonstrate that they can do more than chivvy costs. Within months of her strategic review, the new thinking that had been notable by its absence in her presentation had been publicly demonstrated by her former employers at the Independent.
In a move that surprised and convulsed its rivals, the Independent launched a tabloid version of its staid broadsheet.
Within weeks The Times had followed suit, leaving the Guardian and Telegraph to watch developments nervously. In one move, the nature of the British newspaper market had been transformed and the Mirror faced yet another threat: the appeal of a portable, intelligent daily newspaper.
Although the Independent remains only a minor threat, the prospects of a tabloid Times, Telegraph and Guardian is a serious danger to a newspaper that is already struggling and lacks the money to fight. The Independent's move is still in its infancy, but the speed of News International's response illustrated how dynamic and viciously competitive national newspapers can be. Does Trinity Mirror, under Bailey, have the stomach for the fight, especially if that fight will be waged on new fronts?
In her strategic review, Bailey said that the key to longer-term business growth was to be 'customer-focused, editorially driven and marketing-led... We must consistently deliver editorial excellence. Great journalism drives readership, which in turns drives advertising - it's not rocket science.'
It certainly is not, but it is a science that has eluded the Mirror for many years. Delivering editorial excellence requires investment, and that has been precisely what Trinity Mirror has been incapable of providing for its flagship newspaper, let alone its stablemates, as a result of its own strategic quagmire. Freeing up that investment will require a sea change in management attitudes and a reappraisal of the newspaper division.
Nothing, so far, suggests that Bailey is contemplating that route: 12 months on and her axe is still sheathed. The national newspapers continue to lose readers and the regionals, while increasing their profits, are feeling the heat of competition. She has changed the players at the top, cut jobs and sold a few Irish newspapers: the market has applauded, but the group is fundamentally unchanged.
If Bailey is to make the difference that her appointment promised, then she has to show the talents that she says her predecessors lacked: she has to embrace risk, welcome new ideas and reinvigorate her company. Otherwise, she remains a takeover waiting to happen and all that will define her reign is the price that she achieves. Hardly rocket science.