Made to measure
CEO David Calhoun has a simple plan for Nielsen: Make gobs of money and reshape the future of marketing and media.
 |
| David Calhoun at his home in Connecticut |
 |
| Chief of Research Susan Whiting has taken on added duties. |
 |
| Arthur C. Nielsen Sr. (left) and Jr. in 1954 |
(Fortune Magazine) -- Under big blue letters declaring WE ARE NIELSEN, executives of the world's largest measuring company gathered in the ballroom of a resort near Fort Lauderdale for their second annual leadership retreat. Over two days in early January they trumpeted accounts won and targets achieved, and plotted Nielsen's plans for the year ahead, such as expanding its Internet ratings service into China. But a recurring theme was the company's need to improve - and fast - its spotty reputation with the clients that pay millions for its TV ratings data and retail market-share rankings.
In one moment of levity, a Nielsen sales executive screened a gag video of himself fielding a call from an irate customer, identified by the phone's display as one "A.G. Lafley" (as in the CEO of Procter & Gamble (PG, Fortune 500)). "Okay, okay, I know we're having some quality problems right now," the Nielsen man sputtered into the phone, attempting to defuse the situation. But by the end of the conversation with "Lafley," he was sporting a black eye and missing a few front teeth. After the video ended, he asked the 200 chuckling men and women in front of him how many of them had been on the receiving end of such a call. Half the hands in the house went up.
Sitting in the front row in a zip-front sweater, intently scribbling notes on a white legal pad (he ended up with 22 pages of longhand), was the retreat's leader, Nielsen CEO David Calhoun. It's no wonder he was all business. Calhoun, 50, is a bullet of a man under the best of circumstances. But 18 months after he was hired by the blue-chip consortium of private equity firms - including the Blackstone Group (BX), the Carlyle Group, and Kohlberg Kravis Roberts - that took the company private for $12 billion in the summer of 2006, the former GE (GE, Fortune 500) star executive is engaged in a full-on crusade to raise Nielsen's game. On Feb. 8, just a few weeks after the retreat, Nielsen was forced to send a letter apologizing to the clients of its marquee TV-ratings service - which influences some $70 billion in annual advertising - for chronic delays in providing data.
Plenty of Calhoun's peers - not to mention elite corporate headhunters - are still surprised that this is the challenge he chose. Just two years ago Fortune called him "the most lusted-after managerial star who isn't already a CEO." At the time he was GE's vice chairman, running its sprawling $47-billion-a-year infrastructure business - ten times bigger, by revenue, than Nielsen. The fact that he could make $100 million (if Nielsen goes public or is sold in a few years) was cited by many parties, including Fortune, as the main draw. Even so, it seemed an odd choice to many. His mentor and longtime boss, Jack Welch, observed that Calhoun's GE contemporaries were taking CEO slots at far larger corporate icons, like 3M and Boeing. "I think if he had waited a little longer, he might have gotten a really big one," says Welch now. "But this was the right offer at the right time in the right environment."
Calhoun had his reasons for coming to Nielsen. (And, he swears, it wasn't just the lure of private equity lucre.) One was the unique perch the company occupies at the intersection of commerce and media, giving it influence that arguably goes far beyond its size. Then there's the unique nature of the task at hand. Rather than merely wring more efficiency out of a plodding quasi-monopoly, he wants to recast Nielsen as a customer-focused, tech-savvy enterprise that is as vital in the world of Google, Slingbox, and the iPhone as it was when TV viewing went from black-and-white to color.
Considering that he's an accountant by training who earned his chops at GE as an internal auditor, perhaps it shouldn't be surprising that Calhoun is now on a quixotic-sounding mission to measure the world. He has even adopted one of Welch's well-worn management slogans as both an internal mantra and a pitch to clients: "If it can't be measured," he said to me repeatedly during a series of interviews, "it can't be managed."
But getting people like the real A.G. Lafley to be satisfied with Nielsen is just part of Calhoun's assignment. He has the added urgency of needing to meet aggressive growth goals for the company's owners - despite $8 billion in debt on the books in a softening economy. And Nielsen has never faced more intense competition from old rivals and upstarts, which aim to exploit the instant feedback of the Digital Age in ways that can make Nielsen's original business of methodically gathering and recording data look downright archaic. "Nielsen is in a fight for its relevant life," says Tracy Scheppach, senior vice president at advertising firm Starcom Worldwide.
-
The retail giant tops the Fortune 500 for the second year in a row. Who else made the list? More -
This group of companies is all about social networking to connect with their customers. More -
The fight over the cholesterol medication is keeping a generic version from hitting the market. More -
Bin Laden may be dead, but the terrorist group he led doesn't need his money. More -
U.S. real estate might be a mess, but in other parts of the world, home prices are jumping. More -
Libya's output is a fraction of global production, but it's crucial to the nation's economy. More -
Once rates start to rise, things could get ugly fast for our neighbors to the north. More
