Random House, the world’s largest book publisher, is to be run by a print services executive from Germany, a move parent Bertelsmann hopes will bring new ideas to a slow-growing business.
Announcing his first big personnel decision since taking over the media and services group five months ago, chief executive Hartmut Ostrowski said Markus Dohle would switch from the Arvato services unit to succeed US book veteran Peter Olson on June 1.
The 39-year-old has leapfrogged powerful Random House insiders to become the second Ostrowski protégé to join Bertelsmann’s six-person board.
In e-mails to staff, Messrs Ostrowski and Olson both said the 58-year-old banker-turned-publisher was leaving of his own accord to pursue academic interests, having suffered from pneumonia last year.
People familiar with the situation, however, said the move also reflected Mr Ostrowski’s aim to squeeze more out of Bertelsmann’s mature markets, growing at about 1 per cent a year, in an effort to raise sales growth to 4 per cent.
Dohle’s path to top
Personal: Born June 28 1968 at Arnsberg, Germany. Studied industrial engineering and management at the University of Karlsruhe. Married with two children
1994-95: Works as an assistant in logistics units, owned by Bertelsmann’s print services division, which becomes Arvato in 1999. Works as an assistant at VVA, a German book distributor owned by Arvato
1995-98: Holds various executive positions at VVA
1998-2002: Takes management position at Bertelsmann Media Service, an Arvato subsidiary. Becomes head of media distributor MvL, part-owned by Bertelsmann
2002: Becomes chief executive of the Arvato printing company Mohn Media Group
2006: Becomes head of Arvato’s entire print services division, Arvato Print, and takes a seat on Arvato’s executive board
2008: Becomes chief executive of Random House, Bertelsmann’s publishing division, and joins Bertelsmann board
With this goal in mind, Mr Ostrowski has put up for sale the US units of the media group’s low-growth book clubs division, Direct Group, and eyed buying the 10 per cent in fast-growing RTL TV Bertelsmann does not yet own.
In a speech to senior management in December, he said growth at the company’s services units outstripped that of traditional content business, and that the challenge was to develop both “in collegiality and continuity”.
Mr Dohle spent six years expanding the franchise of Bertelsmann’s printing units, grouped in the Arvato media services division, offering customers layout, storage and distribution services alongside more traditional printing services.
Mr Ostrowski, in a press release, called Mr Dohle “an exceptional entrepreneur” who would “lend a new and necessary impetus to the book-publishing business” through “new ideas and by opening up new lines of business”.
Executives who know Mr Dohle said this could include bringing books and existing multimedia products to market more quickly, better marketing in co-operation with booksellers, and parallel distribution in print and on the internet.
Mr Ostrowski ran Arvato for five years and acted as mentor to Mr Dohle during this time.
With new Arvato head Rolf Buch also on the main board, Bertelsmann’s 50-year-old chief executive is reunited with team members of old.
People close to the privately held media group said the appointment could see heavyweights reconsider careers at Random House – UK head Gail Rebuck and Germany boss Jörg Pfuhl had both been in the running.
But they also said Mr Ostrowski was prepared for, but not intent on, such fallout, as well as accusations that Bertelsmann is becoming ever more provincial after the controlling Mohn dynasty vetoed a flotation two years ago.
Mr Olson was the only native English speaker on Bertelsmann’s main board, and his departure again makes it a forum exclusively of German speakers – RTL boss Gerhard Zeiler, an Austrian, is the sole remaining foreigner.
Anticipating gripes, Mr Ostrowski used a question-and-answer format posted by Bertelsmann on its company intranet to dispel fears about the promotion of yet another German – and a book world outsider to boot.
Executives were chosen for their skill, not for “nationality and birthplace”, he said. The print unit Mr Dohle had run “was a more international business, with more employees, than [the one] he will be handling in the future”.
In a letter to Random House staff, Mr Olson hinted that he would soon be teaching at Harvard as he had “bought an apartment in Harvard Square” and expected to start work “at a nearby university” this autumn.
