The 21st century has not been kind to the media business. Most companies' earnings and stock prices have taken a nasty beating as advertising has dried up and Internet dreams turned to dust. That hellish environment makes Crispin Davis's stewardship at Anglo-Dutch publisher Reed Elsevier look all the more stellar. Since Davis took the chief executive's job in 1999, Reed has bucked the red tide and turned in solid earnings growth. For the fiscal year ended in 2002, operating profits were up 29%, to $831 million, on revenues of $8.2 billion.
Reed Elsevier looked like it might be a sinking ship when Davis, a former beverage and advertising executive, signed on. The company was a textbook case of bad corporate governance. The trouble was a byzantine board and management structure -- a legacy of the merger of the British Reed International PLC and the Dutch Elsevier in 1993. Three different boards -- representing the Dutch and British sides, as well as the new company -- and Dutch and British CEOs were forever fighting. "There was quite a lot that needed fixing," Davis acknowledges. "I think in the past three to four years we have made good progress."
The troubled company's rescue began with the arrival of a new chairman, Morris Tabaksblat, in 1999. The former chief of the Dutch side of Unilever Group, he streamlined the board structure and recruited Davis to be the sole honcho. Davis sharpened Reed's three existing core businesses -- science, legal, and trade publications. He added a fourth tranche with the purchase of the U.S. textbook giant Harcourt General in 2001.
Davis bounced out bad managers, brought in good ones, and took out $570 million in annual costs. Despite the global economic downturn, he kept investing close to $500 million per year in new products and better delivery systems, especially on the Internet. Reed Elsevier is a rare Internet success story. Online sales at legal search engine LexisNexis Group and other units topped $1.6 billion in 2002.
Davis, 54, is regarded as a cool-headed manager who is careful to preserve time for his wife, Anne, and three grown daughters. The Oxford grad vows to keep pumping up Reed Elsevier's top line with new products and geographical expansion. This star manager has a formula that works.