Featuring Ruth Reichl’s memoirs from her time as editor-in-chief of Gourmet magazine from 1999–2009 might strike some readers as quite unusual compared to Lorange Network’s typical reviews. Despite its unusual subject matter, however, this book holds several business insights regarding disruption that I felt would benefit our community. Reichl’s memoirs highlight the period just prior to the end of print media´s dominance—that is, before the Internet fundamentally changed the media industry, dried up its advertising revenues, and disrupted reading habits.
A US citizen with half of her family being of German origin, Reichl attended Berkeley and considered herself a hippie before increasingly becoming part of the corporate world—first as the food editor for the Los Angeles Times and later as a leading restaurant critic for the New York Times. In Save Me the Plums, Reichl discusses her gradual trajectory in becoming the editor-in-chief at Gourmet. The author’s international background and taste for food from around the world serve as a starting point. She then discusses how she received a formal offer from the owner of Gourmet’s parent company, Condé Nast, and how Condé Nast subsequently went about courting her to join Gourmet. This sign-up process culminated with her answering yes to the job and the subsequently elaborated communication of this event orchestrated by Condé Nast.
The bulk of the book then discusses various aspects of life at the magazine, such as how they went about creating a superb demonstration kitchen, how Reichl gradually came out on top of the multitasking challenge of being a successful boss, how she struggled with letting non-performers in her team go, and how she coped with the inherent conflict between her editorial side of the production and the commercial/advertising side. The book also sheds some light on various Condé Nast parties, featuring a lot of famous names and plenty of pomp and circumstance. One might safely conclude there was a lot of extravagance. Money never seemed to be a constraint. Her work also included expensive foreign trips. Gourmet magazine was doing well!
Reichl then discusses how she went about testing out new senior team members, as well as how she checked out her own potential successor. She of course also discusses how to attract the best possible authors to write for a magazine—a key part of her job!
The final part of the book discusses the gradual demise of this once-formidable magazine and its final struggle to survive—a fight the magazine ultimately lost. In hindsight, the gradual loss of advertising revenue was to blame. However, at the time, Reichl did not see these early signs of the Gourmet’s weakening business model. The owner seemed to see it more clearly and tried to signal this to the magazine’s leadership with little success. Reichl seemed to perform well in her editorial role and was even singled out in 2007 as “editor of the year” by her industry cohorts, but the magazine’s worsening economic performance strengthened the concerns at the corporate level.
Eventually, Reichl also came to recognize that the end might be near for Gourmet. She introduced new features in her magazine, but these changes did not seem to improve matters. A last-minute focus on Parisian food did not work either. At that same time, several of Condé Nast’s other magazines were closing, including House & Garden, Portfolio, and Men’s Vogue.
Then, in September 2009, Condé Nast’s owner decided to close Gourmet. Ironically, advertising revenues had already started to pick up again as the economy recovered from the recession. However, the owner still decided to terminate the magazine. The anticipation of an increasingly significant Internet era must have been key. Interestingly, most employees did not have problems finding new jobs. After the close, Reichl came to realize how lonely life had become now that she was no longer part of a functioning team.
Worth mentioning is that the book also contains five food recipes: spicy Chinese noodles (p.57), jeweled chocolate cake (pp.67-68), Thanksgiving turkey chili (pp.140-141), Gina Maire’s cheddar scallion biscuits (p.173), and German apple pancakes (pp.259-266). These add to the real-life hands-on feeling observable throughout the book.
What can we learn from this case study of the rise and fall of Gourmet magazine? This reviewer sees at least three key managerial implications:
First, how can one better predict that one’s business model might no longer be as viable as before and that fundamental changes are needed? One early warning sign could be that economic performance, particularly the free cash flow, is weakening. Such a development leads to the realization that the income-generation side has weakened (in this case, less advertising). Deteriorating cash flow may also signal that expenses are getting out of hand (in this case, the extravagant spending habit). What can be done to improve such adverse factors?
More fundamentally, are there technological shifts that can adversely impact one’s present business model—even disrupt it? In this case, the rise of the Internet was the factor impacting conventional advertising above all.
In that regard, assessing new competition is crucial. In this case, Bon Appétit was more in line with modern readers’ preferences than Gourmet. Had Gourmet become too stodgy? At the time, the parent company Condé Nast had already developed its own web page for food recipes. For this reason, Condé Nast headquarters actually kept Gourmet from developing its own website to avoid weakening the new corporate web page. This decision effectively hampered any effort by Gourmet to update or evolve its own business model. An important lesson here is that a key corporate function should stimulate the evolution of the business models of its existing divisions, even at the risk of cannibalizing the parent company’s business (please recall Peter Brabeck’s discussion of Nespresso overcoming resistance at Nestlé).
Second, the process of attracting new upper-level talent might involve the senior management of the firm itself, and the senior management must be good at persuasion! Effective senior managers must be good at attracting new talent by bonding with potential new team members. This includes listening, persuading, being honest and genuine, and being enthusiastic while not overselling!
Third, developing a stronger leadership team over time is crucial. This effort involves working on the team’s culture to achieve a good balance between individual excellence and collaboration. Developing a positive spirit—a “can-do” spirit that allows creativity to take hold—is also key.
This well-written book is thus more than just about the editor-in-chief’s memoirs. This case study of the ups and downs of Gourmet magazine gives us many important managerial insights applicable to business in general.
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